※ The following abstracts are those of the articles published in the second half of 2006.
The first one regarding the right to publicity was presented at the Pusan International Film Festival in October 2006. The writer was one of the special guests invited to the international events. This article (in Korean) was contained in the Law Journal of Youngsan University, December 2006.
The second one is practical know-how which I want to share with colleagues who are engaged in the negotiation of international contracts. The article was included in the Korean Forum on International Trade and Business Law, December 2006, which was dedicated to the retiring SNU professor of law, Dr. Sang-Hyun Song.
The final listing is concerning the Equator Principles which were renewed in July 2006 and introduced for the first time in Korea on the occasion of the Summer Academic Conference of the Korean Association of Trade and Commerce held at Soongsil University, Seoul on June 30, 2006. The excerpt of this article was conveyed in the Hankyung Daily Newspaper on August 9, 2006. Its full text "How to Reflect Sustainable Development, exemplified by the Equator Principles, in Overseas Investment" was included in the Korea Trade & Commerce Journal, published in July 2006.

              T O C

           Movie-making and the Right of Personality
           Legal Issues of a Consulting Agreement
           Equator Principles and Project Financing

■ Does Movie-making Based Upon a Real Life Story Harm the Right of Personality?

These days we can see a considerable number of movies based upon real life stories. Take an example of foreign-made movies, there are "Malcom X"(1992), "Shindler's List"(1993), "Nixon"(1995) and "Ray"(2004), among others. In Korea, we can count "Mr. Gam's Victory"(2004), "Rikidozan: A Hero Extraordinary"(2004), "Mal-a-thon"(2005) about an autistic young man, "Barefoot Gi Bong"(2006), and "Blue Swallow"(2006) regarding the first female pilot in Korea, Park Kyungwon.

This phenomenon gives rise to a series of questions:
- How to deal with some discrepancies between the historical facts and the movie-maker's story line or description of characters in the movie;
- How much to ensure the freedom of expression in the movie-making against the appropriation or commercial use of the names and likenesses of real people; and
- How to provide remedies to the affected people on account of alleged defamation or merchandising.

Remedies include criminal actions in defamation, civil damages in tort such as threatening the right of personality. The United States courts have developed the concept of the right of publicity, which protects the names, images, voices, other likenesses of the celebrity like an intellectual property right.

It would be unfair to allow unauthorized people gain economic benefits by means of commercial use of names and likenesses or deceptive appropriation of the identities of celebrities. Therefore, the affected people should be provided with the right to control the use of their names and images for commercial purposes, including movie-making. While the right of personality is protected on the ethical ground, the derivative right of publicity is usually invoked like an intellectual property right of celebrity because their fame could be treated as property. The concept of the "right of publicity" was first introduced into the Korean courts when a Korean manufacturer's trademark of "James Dean" was disputed by the American movie star's survivors.

As Professors Dogan and Lemley asserted in their article, "What the Right of Publicity Can Learn from Trademark Law"(58 Stan. L. Rev. 1162), copyright is the wrong analogy because there is no utilitarian cause in promoting and marketing celebrity images. Though copyright's fair use doctrine involves trade-offs between the interests of original creators and the users of their creative works, the right of publicity has no similar trade-offs. On the contrary, the right of publicity protects a celebrity's interest in her name and likeness, much as trademark law protects a business's name and other trademarks.

Movie stars, talents, pop singers and professional sportsmen need to prevent commercial use of their names and likenesses that are likely to confuse the public, to dilute or merchandise their reputation rather than monetary incentives. On the other hand, what types of remedies could be provided to non-celebrity? They may resort to causes of action such as privacy infringement, or libel or defamation.

It is noteworthy that, in November 2006, some lawmakers in the Korean National Assembly initiated to amend the Copyright Law in order to include the property-like right of images of celebrities. As mentioned before, the celebrity identity or images are quite different from their commercialized character. It's because the celebrities have done little to create or improve their own identity or images. Once such a right is protected like a property right, it might discourage cultural and creative activities using celebrity names, images and so forth.

In conclusion, it would be better to treat the right of publicity like trademark rather than copyright. Thus any confusion, dilution or merchandising of celebrity identity in the context of business transactions will be controlled. Then it could lead to a win-win resolution in this diversified borderless world which is connected by the Internet or satellite broadcasting service.
The more the citizens around the world can enjoy the Korean media content on celebrities, the longer the current Korean Waves will last. ▲

■ Legal Issues of a Consulting Agreement

Since the foreign exchange crisis in 1997, more and more Korean companies have been asking consultants of professional knowledge and experiences on business operation. In particular, with respect to the public offering of corporate bonds without bank guarantee, the credit rating and other advisory services by a credit rating agency are required by a regulation for the protection of investors.

In order to provide consulting services, the consulting firm has to make and enter into a consulting agreement with its client. Take an example of feasibility study, management diagnosis or financial advisory services. What the client wants to know about such an assignment is to be provided for in the scope of works and other terms and conditions of a consulting agreement. Though a consultant's standard agreement is hardly accepted by its clients, there must be a general list of provisions to be included in the agreement.

This article shows draft provisions of a typical consulting agreement that should not be regarded as the "right answer." They are a choice from a spectrum of possibilities in a situation where the consulting firm and its client pursue the most reasonable solution for the matter of public offering of corporate bonds, conducting M&A or implementation of a big project.

The agreement might be drafted in such a manner as the consultant feels comfortable. Sometimes it depends on the negotiating styles and tactics of the consultant, and whether he or she is a lawyer, public accountant or business analyst.
As a whole, the consulting agreement should stipulate the purpose and background of the agreement, scope of works, rights and duties of the parties, the calculation of consulting fees, confidentiality agreement, the representations and warranties of the client, treatment of the intellectual property rights, limited liabilities or indemnification of the consulting firm, dispute resolution, and the special provisions as requested by the client. ▲

■ Introduction to the Equator Principles

Today's financial institutions usually take environmental issues seriously into consideration as they could not evade lender liability in an increasing number of cases. On the international scene, a brand-new concept of the "Equator Principles" in the New Millenium has driven more and more international banks to adopt these Principles in project financing.

Sustainable development has been a key word in understanding new trends of the governments, financial institutions, corporations and civic groups in the 21st century. The Equator Principles are a set of voluntary environmental and social guidelines for sustainable finance. These Principles commit bank officers to avoid financial support to projects that fail to meet these guidelines. The Principles were conceived in 2002 on an initiative of the International Finance Corporation (IFC), and launched in June 2003.

Since then, dozens of major banks, accounting for up to 80 percent of project loan market, have adopted the Principles. Accordingly, the Principles have become the de facto standard for all banks and investors on how to deal with potential social and environmental issues of projects to be financed. Compliance with the Equator Principles facilitates for endorsing banks to participate in the syndicated loan and help them to manage the risks associated with large-scale projects.

The Equator Principles call for financial institutions to provide loans to projects under the following circumstances:
- The risk of the project is categorized in accordance with internal guidelines based upon the environmental and social screening criteria of the IFC.
- For Category A and B projects, borrowers or sponsors are required to conduct a Social and Environmental Assessment, the preparation of which must meet certain requirements and satisfactorily address key social and environmental issues.
- The Social and Environmental Assessment report should address baseline social and environmental conditions, requirements under host country laws and regulations, sustainable development, and, as appropriate, IFC's Environmental, Health and Safety Guidelines, etc.
- Based on the Social and Environmental Assessment, Equator banks then make agreements with borrowers on how they mitigate, monitor and manage the risks through a Social and Environmental Management System. Compliance with the plan is included in the covenant clause of loan agreements. If the borrower doesn't comply with the agreed terms, the bank will take corrective actions.

The Equator Principles are not a mere declaration of cautious banks but a full commitment of lenders. A violation of the Principles in the process of project financing, which led to an unexpected damage to the affected community, would not give rise to any specific legal remedies other than ordinary lawsuits. So it is more effective for banks to ensure consistent implementation of the Principles and to have them take responsible measures to solve social and environmental issues.

Public interests have recently mounted up with respect to environmental issues on the occasion of the Supreme Court's decision (2006Du330) on the fiercely debated reclamation project at Saemangeum. The majority Justices said that the expected environmental damages like probable pollution of water and soil were not believed so serious and that the Administration should continue to implement the project seeking ways to make it more environment friendly.

In this case, though the Category A Saemangeum Project was carried out by a government agency, the Supreme Court behaved itself as a signal giver to approve or stop the environment-related project like an Equator bank in project financing. At present, there is no Equator bank in Korea in contrast to three big banks in Japan. Also Korean contractors, which are aggressively bidding for Category A-type projects in South East Asia and Mideast, might find themselves in a disadvantageous position because they are generally ignorant of the environmental assessment associated with project financing.

In this regard, Korean banks and overseas project contractors should care for the revised Equator Principles and the latest developments in project financing more seriously. It's because its scope has expanded to the capital cost of US$10 million or more across all industry sectors regardless of developing countries or not. It should be noted that, for a Korean bank, being an Equator bank is more or less burdensome in a short-term period, but it must be conducive to minimizing risks and building up good reputation in the long run. ▲
For further information, visit the homepage of [Equator Principles]