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TRADE AND INDUSTRY PORTFOLIO COMMITTEE
16 January 2002
COPYRIGHT AMENDMENT BILL AND PERFORMERS’ PROTECTION AMENDMENT BILL
Chairperson: Dr R. DaviesDocuments handed out:
Department of Trade and Industry – 2002: Legislative Programme
Letter from Carole Croella of the World Intellectual Property Organization to Mr M. Netshitenzhe, Director of the South African Patent and Trademark Office (Department of Trade and Industry)
Draft Regulations for the Administration of Collecting Societies in Terms of the Copyright Amendment Bill (ACT), 2001 (Department of Trade and Industry)
Speaking Notes Based on Draft Regulations of the Copyright and Protection of Performers Amendment Bill, 2001 (Department of Trade and Industry) [See Appendix 1]
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The Chairperson highlighted the working program for the year and stated that at this meeting and again the next day, 17 January 2002, the Committee would complete outstanding legislation from 2001, namely the Copyright Amendment Bill and Performers’ Protection Amendment Bill. He also briefly discussed how the Committee would handle the final position open on the National Gambling Board. Representatives from the Department presented on issues regarding the regulations that it would implement following the passing of the aforementioned bills, and members of the Committee asked questions. Because several clarity issues and discrepancies remained between the proposed regulations and the bills at hand, the Chairperson asked the representatives to return the following day with a revised version of the regulation so that the Committee could finalise the corresponding bills.
The Chairperson stated that the first meeting following the official opening of Parliament would be held on 13 February, and the East London IDZ hoped to present to them then. He said that the Committee would have fourteen bills to consider this year, and most would not come until the second half. There was a proposal that the Committee would go to Pretoria on 25-26 February if it could be arranged, and the hearings on industrial policy would likely be in late April. Concerning the remaining space on the National Gambling Board, there were 37 CVs to consider, so a small working group from the Committee would be appointed to sort through the CVs and reduce the list to a small number of prospects that could be interviewed by the Committee. Mr M. Netshitenzhe, Director of the South African Patent and Trademark Office, then presented on the Copyright Amendment Bill and Performers’ Protection Amendment Bill on behalf of the Department.
The Department’s Draft Regulations of the Copyright and Performers’ Protection Amendment Bills
Mr Netshitenzhe said that there had already been general agreement that the formation of regulated collecting societies would be beneficial for South African performers provided that certain conditions were met. These conditions included local content and entitlement to collection fees from foreign works in cases where reciprocal establishments and agreements did not exist. He briefly summarised the Department’s draft regulations for collecting societies. He added that these regulations would only apply to needle-time, so extending this system to all rights within the copyright regime, as discussed last year, would require amendments at a later date. The draft regulations would have to be passed by the Minister, but the Committee was being consulted so that the bills and the regulations would be compatible.
Questions and Discussion
Ms J. Benjamin (ANC) asked if organizers of live performances also had to pay collecting societies.
Mr Netshitenzhe replied that, in this case, under a conducive environment, the organizer would be required to pay the collecting society, according to regulation 17. If the artist was not in a collecting society, this would not be applied.
Ms Benjamin then asked if organizers were required to pay performers and collecting societies.
Mr Netshitenzhe replied that the collecting society would discuss terms and conditions for the event with the artist and would then be the responsible party for working these out with the organizer and collecting.
Ms F. Hajaij (ANC) stated that she wanted more information about the arbitration board and the kind of sanction that it could pronounce.
Mr Netshitenzhe stated that the arbitration board would be under the Minister like any other board. It would be self-sufficient but appointed by the Minister. Decisions by the board would be final but subject to judicial review.
Ms F. Mahomed (ANC) asked what the response would be if one defaulted on the regulations.
Mr Netshitenzhe replied that there would be a one-year period for transition, and those operating not subject to the regulations at that point would be out of the system. He stated that artists could choose not to be in a collecting society if they thought they were strong enough to go alone, but it would be beneficial to be in a collecting society if everyone was.
Mr S. Rasmeni (ANC) enquired about the local content requirements of the regulations.
Mr Netshitenzhe stated that local content for public broadcasters was meant to be 40% and that of commercial broadcasters was 25%. He indicated that he was not certain where these figures came from, but it was not information for the public. It was time now for collecting societies to monitor local content as well.
The Chairperson referred to the issue of paying royalties to foreigners. He thought the idea was that royalties would not be paid to foreigners if South African artists would not receive royalties from that country reciprocally. This was a potential point of contention because it gave the government the power to rule that the treatment of South Africans elsewhere was not proper. Additionally, if South African artists abroad were given a higher value than other nationals were in South Africa, due to financial circumstances, this could allow foreigners to claim higher value in here.
The Chairperson also argued that the Department was claiming to have outstanding issues to decide on concerning the arbitration board, and these would have to be finalised before the Committee could properly make decisions regarding the same.
Ms C. September called attention to an apparent contradiction on page four caused by a clause that should be removed.
Mr Netshitenzhe told the Committee that the Department called on the pronouncements from the Rome Convention as references in drafting the regulations, so there were still several issues in the drafting that needed to be changed. They used this method in order to ensure that the regulations would not contradict international treaties.
Ms S. Rajbally (MF) asked how collecting societies would affect promoters.
Mr Netshitenzhe argued that, on the issue of promoters, in a conducive environment in other countries, foreign performers would have to register as workers, so they would have to go through Home Affairs. There was nothing in South Africa regulating this, but the laws of that country would have to apply.
Ms Benjamin referred to regulations 8 through 10 and asked how South African societies could be allowed to collect money from foreign nationals if they were not technically allowed to retain money from them.
Mr Netshitenzhe returned to the issue of the arbitration board stating that they were not tampering with the potential legislation at the moment, but it would come out when the regulations are released for public comment.
The Chairperson asked if the Department was dropping those regulations and the ones on foreign performers.
Mr J. Strydom, legal advisor for the Department, said that the only aspect of the Copyright Amendment Bill entitling the Minister to make regulations and establish collecting societies was clause 4. He added that provisions in the proposed regulations were inconsistent with parts of the Bill. There was no provision empowering the Minister to set up an arbitration board. He said it would not be possible to take the Bill further until there was agreement on whether the Minister would be allowed to establish the board and whether the reciprocity issue would be addressed in the legislation or the regulations.
The Chairperson said that they would not pass the either bill that day but would let the Department revise the regulations to resolve the inconsistencies, and the Committee would finalise both bills on 17 January, the following day.
Ms September asked how performers would benefit from one country to another. She said that the sentiments in section 4 concerned coming from a country where the rules were not up to their standards, and artists would be judged on that. This might contradict international treaties. She suggested rewording this clause.
Mr Strydom replied that the purpose was to ensure that the standards of proper compensation that performers received in South Africa would be protected across borders. To encourage that, we reciprocate the treatment that other countries offer our artists to artists from those other countries coming here. He added that they would review the wording that afternoon.
Mr D. Lockey (ANC) asked if they would collect royalties from foreigners and distribute them in South Africa if they did not give the royalties to those performers.
Mr Netshitenzhe stated that royalties would not be collected if they were not going to be given to the foreign artists.
Mr Lockey asked about artists from one country who were contracted out to an agency in another country. He asked if the royalties would be sent to the company if the company was not going to pass them on to the artist.
The Chairperson stated that this might be a loophole that should be reviewed by the Department.
Mr Lockey asked whether these regulations would apply to composers.
Mr Netshitenzhe said that composers did not fall under these collecting societies, but this was an issue that the Department would likely suggest later in amendments.
Ms September commented that the regulations only applied to needle-time and asked if the Department had consulted with various stakeholders in drafting these regulations.
Mr Netshitenzhe replied that a music task team had been appointed by the Minister of Arts and Culture last year, and public hearings had been held. In May 2001, the team dealt with the issue of needle-time and copyright issues in general. At this time, needle-time was the only matter dealt with.
Ms Hajaij stated that the only jurisdictions they had mentioned as references had been from the Western world, and she wondered if they had consulted any from the East or Africa.
Mr Netshitenzhe replied that they had reviewed the copyright acts from Namibia and Zimbabwe, and they operated roughly the same as South Africa’s current act. The Department wanted to address enforcement and some level of government supervision. Additionally, they did not want to negate their international obligations in terms of the WTO, and some of South Africa’s neighbours were not yet bound by these obligations.
The Chairperson asked the representatives from the Department to return tomorrow with a version of the draft regulations that took into consideration the comments from the meeting so that they could make a decision. He mentioned that this thorough consideration of the regulations was a step further than parliamentary committees generally went, but it was difficult to decide on policy issues on these topics without knowledge of what the regulations would be. The meeting was adjourned, and the Committee would meet again the following day.
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SPEAKING NOTES BASED ON DRAFT REGULATIONS OF
THE COPYRIGHT AND PROTECTION OF PERFORMERS
AMENDMENT BILLS, 2001
1.1 As it may be recalled, in 2001, the abovementioned Bills were tabled before the Honourable members of the portfolio Committee;
1.2 There was a general agreement that the formation of regulated collecting societies will enhance the revenue stream of South African musicians and performers, provided certain conditions are met.
1.3 These conditions include local content and entitlement to collection of fees flowing from foreign works in the absence of reciprocal agreements with foreign collecting societies;
1.4 Further, it was agreed that DTI should draft Regulations in regulating these collecting societies.
2. Synopsis of the Draft Regulations
2.1 The Draft Regulations are Annexure A of this Speaking Notes.
2.2 In general, the Draft Notes provide for the following:
2.2.1 Draft Regulation 1 provides for the administration of performances and broadcasting of music and production of phonograms and videograms of such works;
2.2.2 Draft Regulation 2 in the main provides for compulsory authorization of persons who want to administer this right (needle-time), by an agency of DTI, the Company and Intellectual Property Registration Office (CIPRO);
2.2.3 A natural or legal person can administer this right;
2.2.4 Draft Regulation 3 provides for conditions under which authorization should be granted, e.g. on a written application by the person who intend to form a collecting society;
2.2.5 Draft regulation 4 requires that the written application for authorization must be accompanied by constitution of the collecting society and the declaration of membership of the collecting society, whose minimum membership should be 50;
2.2.6 Draft Regulation 5 provides in the main that authorization may be refused under certain conditions, e.g. if the constitution of the collecting society does not comply with the provisions of South African law;
2.2.7 Draft Regulation 6 provides for the duration of the grant of authorization and the need to publish such an authorization in the South African Intellectual Property Journal;
2.2.8 Draft Regulation 7 provides that under certain conditions, revocation for authorization must be possible, e.g. if there is repeated floundering of obligations;
2.2.9 Draft Regulation 8 imposes obligations on collecting societies, e.g. they must not be profit making organizations and they must enter into reciprocal agreements with foreign counterparts.
In this regard, it is important to share the opinion of WIPO. WIPO addresses the issue of equality (nationals and foreigners) and this is aptly covered in Draft Regulations 8, 9 and 10.
WIPO is of the view that South African Societies are not entitled to retain money from foreign nationals who are non-resident and their collecting societies are collecting monies for South African performers, but are not transmitting this money to South Africans – Annexure B. This view needs to be followed up since it seems to be partly incorrect and partly correct.
2.2.10 Draft Regulation 11 provides that collecting societies must draw up tariffs for the remuneration that they collect; and should negotiate terms of each tariff with relevant bodies of users;
2.2.11 Draft Regulation 12 obliges collecting societies operating in the same field of utilization of works or performances to draw up a joint tariff which should be approved;
2.2.12 Draft Regulation 13 lists certain factors to be considered when calculating tariffs;
2.2.13 Draft Regulation 14 obliges collecting societies to set up welfare and assistance schemes for the holders of rights and interests that they administer;
2.2.14 Draft Regulation 15 obliges collecting societies to grant exploitation rights to any person so requesting on equitable terms, and if a dispute arises, it must be submitted to the Arbitration Board for settlement;
2.2.15 Draft Regulation 17 – Organizers of public communications of copyrighted works must obtain authorization from collecting societies beforehand;
2.2.16 Draft Regulation 18 provides for collecting societies to draw up distribution regulations and submit them for approval;
2.2.17 Draft Regulation 19 provides for distribution of proceeds;
2.2.18 Draft Regulation 20 provides for detailed provisions which should be in the constitution of collecting societies;
2.2.19 Draft Regulations 21 provide for a detailed obligations on the rendering of accounts and audits;
2.2.20 Draft Regulation 22 provides that collecting societies must furnish information to third parties such as supervisory authority and any other person who wishes to know whether a collecting society administers exploitation of certain work;
2.2.21 Draft Regulation 23 compels users to furnish information to collecting societies to enable them to draw up and apply tariffs and distribution of proceeds;
2.2.22 Draft Regulation 24 provides that the Supervisory Authority must be CIPRO, an agency of DTI;
2.2.23 Draft Regulation 25 obliges the Supervisory Authority to keep a Register of all approved collecting societies;
2.2.24 Draft Regulation 26 provides that any amendments should be notified to the Supervision Authority;
2.2.25 Draft Regulation 27 obliges the Supervisory Authority to act against collecting societies which do not comply with regulatory obligations, e.g. withdrawal of authorization;
2.2.26 Draft Regulations 28 – 31 deals with the Arbitration Board. Its formation is proposed since it may be cheaper to manage and cost effective;
2.2.27 Draft Regulations 32 – 33 deal with the functions of the Arbitration Board such as the approval of tariffs;
2.2.28 Draft Regulation 34 deals with inter alia, transitional arrangement for existing collecting societies which are not regulated;
2.2.29 Draft Regulation 35 prohibits retrospectivity of these Draft Regulations;
2.2.30 Draft Regulation 36 mandates collecting societies to deduct 10% from the collected remuneration for administrative costs;
2.2.31 Draft Regulations 37 provides that the Draft Regulation will enter into force when the Minister issue them.
3.1 In conclusion, it is clear from the Draft Regulations that collecting societies would be regulated efficiently for the benefit of their members. These Draft Regulations’ scope of application is only for needle-time but as discussed last year, all rights within the copyright regime should be subjected to collective management and this need some few amendments in the Copyright Act, 1978. This can be done during the 2002/2003 Parliamentary session as consultation in this regard is already completed. There is a need for collecting societies to progressively demand for local content for broadcasts to be raised substantially. There is also a need for collecting societies to start to confront issues of piracy and counterfeiting and general enforcement of intellectual property protection; and