Intellectual Property Laws Amendment Bill: National House of Traditional Leaders submission; Industrial Policy Action Plan (IPAP) Committee Report: consideration

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Trade and Industry

29 April 2013
Chairperson: Ms J Fubbs (ANC)
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Meeting Summary

A Parliamentary Legal Advisor briefed Members on the National House of Traditional Leaders (NHTL) submission, dated 10 April 2013, on the Intellectual Property Laws Amendment Bill [B8B-2010]. She explained to Members the most important aspects of the comments that the NHTL had made, and indicated how and where the Committee had made provision for them. She observed that the Committee had already considered every comment of the NHTL. 

The Chairperson observed, in the light of the briefing, that the Committee had therefore been on the right track and that the NHTL concurred with the Committee's work. The Committee had already complied with the issue of the letter to the NHTL by asking the Secretary of Parliament to write it. The Committee had already taken a decision on the tagging at a previous meeting. Then the Committee had had to await the NHTL's response. The Committee had thought that the response could differ from the NHTL's original submission, but it was now quite clear that it did not differ in any way. Thus all the above technical problems had been complied with.

An ANC Member proposed a 30-minute break so that Members could confer with their party colleagues in caucus with a view to the Committee's adopting a report that it agreed to the Bill. This was especially important, as the Bill still had to be referred to the National Council of Provinces (NCOP). Another ANC Member seconded the motion.  A DA Member objected. The legal implications of what the Committee was doing were quite serious. To make intellectual property part of copyright protection meant that one could obtain protection only for a limited period of time. On the other hand, what one wanted to achieve was to protect indigenous knowledge for perpetuity. This was a massive issue. It was clear that the NHTL had not exercised its mind. He proposed a consideration of all the implications of what the Committee was doing. This required serious legal consideration. Such could not be done in 30 minutes.

The Chairperson asserted that the Committee had long since passed that stage. Furthermore, the Committee had to confine itself to the President's reservations, not reopen discussion on the substance of the Bill. Moreover the Committee had received the NHTL's response, which could have differed from its previous submission but did not.

The Committee would meet to vote on the Bill the next day, which would be sufficient time for the Members of parties that did not agree with her interpretation to confer.

The Committee considered and discussed its Report on the Industrial Policy Action Plan (IPAP). This was the first totally composite draft of the IPAP report, and it included additional material - on BHP Billiton. However, she observed that BHP should also be put in the context of energy, electricity tariffs, jobs and beneficiation. She pointed out that Members might wish to raise port charges about which industry and manufacturers complained. She suggested that the training arrangements of large companies could perhaps be broadened to offer training to persons beyond a company's own employees. She noted that Transnet proposed that cargo charges for labour-intensive and value-added products should be reduced. She reminded Members that the World Economic Forum (WEF) would take place from 08-10 May in Cape Town. There was to be a focus on agriculture and green products. She asked for Members’ revised or new recommendations and comments.

DA Members recommended the formation of an interdepartmental committee at the very highest level with the ministers and chief executive officers of all the departments and SOEs involved in administered prices. This would include the dti, Departments of Energy and of Transport, Transnet, and Eskom. Also recommended was the concept of a cost-reduction 'caucus' or forum. The National Economic Development and Labour Council (Nedlac) should become far more effective and efficient in dealing with skill shortages, productivity level and the labour environment. There needed to be a fundamental discussion with the National Treasury and the Department of Cooperative Governance and Traditional Affairs on the funding of local government and the extent to which municipalities were charging exorbitant electricity surcharges to raise revenue.                       

ANC Members suggested including the Economic Development Department (EDD) in the picture. Small and medium enterprises (SMMEs) and cooperatives should be utilised as a tool to the benefit of the IPAP. All sectors that were giving rise to increases in administered prices should be investigated. This would include not just electricity but water as well. It was also necessary to investigate the extent to which forms of renewable energy could immediately be put in place. Eskom and other energy stakeholders should explore lessons from other countries and other industries on saving energy consumption, such as automatic switching-off lights. The Chairperson noted much innovative thinking was coming to the fore. She said that there was not only a need for jobs but also strategic skilling of people done in a faster manner. Members should ask themselves what the Committee could put in its report to assist the leadership in government and in the private sector to change the way it was doing things. There was a tendency for government to embark on massive projects, but, if one promoted scientific innovation, one could build instead perhaps four smaller dams instead of one, use more labour, and people would benefit far earlier, possibly within one year at the latest from one of the dams. It was commendable to bring the producers, suppliers and the consumers together. An ANC Member added that there was a very healthy conversation between the government and the general population, but what seemed to be missing was a sense of urgency. A way must be found to develop this sense of urgency between both government and business so small projects were started to alleviate the challenge of administered prices. It was not enough just to talk about the matter. Unemployment was rising. Inequality and poverty were rife.

The Committee would meet again the following day to adopt the report.
 

Meeting report

Intellectual Property Laws Amendment Bill: National House of Traditional Leaders submission
Adv Charmaine van der Merwe, Parliamentary Legal Advisor, said that the National House of Traditional Leaders (NHTL) had submitted its comments following referral, in terms of section 18(1) of the Traditional Leadership Governance and Framework Act 2003 (TLGFA). She had compared the NHTL’s latest set of comments with those which the NHTL had submitted during the first round of public submissions to this Committee and there was nothing which new. In other words, this Committee had already considered every single comment that the NHTL had made in its 10 April 2013 submission.

She explained to Members the most important aspects of the comments that the NHTL had made, and indicated where the Committee had made provision for them and in what manner so that Members could be duly satisfied that the Committee had fully considered them.

The NHTL had commented that:
‘… There is the need for the recognition and protection of the indigenous knowledge system in South Africa.’

Adv Van der Merwe pointed out that the whole Bill was aimed at fulfilling this need.

The NHTL had commented that:
‘… Traditional leaders and their communities should be involved in the processes’

‘… Traditional leaders should be the access point to the communities…’

Adv Van der Merwe’s response was that provision was made for a community protocol. The community protocol set out the structure of the community and how dealings with the community should be done. (For example, Clause 3, Sections 28B(5); 28C(9).

The NHTL had commented that:
‘…some cut across different communities…’

Adv Van der Merwe’s response was that ownership could be shared amongst communities. (See Clause 3, Section 28D(3) for instances where for some reason it could not be shared: The National Trust became owner);

The NHTL had commented that:
‘…the definition of “traditional work” as a literary work, an artistic work or a musical work …will cause conflict…if that is left (to communities) to determine.’

Adv Van der Merwe responded that the Committee had reworked definitions in detail to ensure that all definitions provided clarity on what was meant with each term. The National Trust (Clause 3, Section 28l) could assist communities. Institutions that could mediate disputes would be accredited (Clause 3, Section 28K(1).

The NHTL had commented that:
‘…traditional leaders should form part of the National Council…’

Adv Van der Merwe referred to Clause 3, Section 28L: The National House of Traditional Leaders may be consulted before the appointment of Council members and at least two persons must have ‘expertise and extensive knowledge in, and patronage of, traditional cultures and values of indigenous communities.’

The NHTL had commented that:
[it]  ‘…supports the development of a data base; however these must protect the contents…’

Adv Van der Merwe referred to Clause 3, Section 28C(15) which provided for the confidentiality of the content of the database, when needed.

The NHTL had commented that:
‘The data base must therefore assist identifying the beneficiaries…’

Adv Van der Merwe’s response was that Clause 3, section 28C(10) required the community protocol be kept with the recordal of the work, thus ensuing identification of the owners / beneficiaries.

The NHTL had commented on:
Ownership by the fund and payment of royalties to the fund.

Adv Van der Merwe’s response was that that Committee had completely amended the provision. The National Trust became owner only in exceptional circumstances (Clause 3, Section 28D(3). Money was paid to the National Trust only when it was the owner, or when the community requested it to.

Discussion
The Chairperson thanked Adv Van der Merwe. She observed that the Committee had therefore been on the right track and that the NHTL concurred with the Committee's work. She appreciated that Adv Van der Merwe had highlighted again the areas that could or would be identified as having a direct interface or impact. She turned to Members. The Committee had been advised to go this other route as well and consider in the main the reclassification or tagging of the Bill, the process of the NHTL, which House, for the record, the Committee had invited, the House had submitted, and the House had engaged verbally. However, the Committee's Chairperson should not herself have sent the letter but instead the Secretary to Parliament should have sent the letter. This was the technical problem. In spirit the Committee had complied. She turned to Members purely for comment. There was no need to deal with the substance.   

Dr W James (DA) had received notice of the meeting, but not the NHTL document. So he had not had time to consider it.

The Chairperson said that nobody had received the NHTL document. She had referred to the IPAP report document.

Dr James understood. However, he reiterated that he had not had time to study the NHTL document.

The Chairperson said that she herself might not have looked very clearly at this document. She was not disallowing Dr James remarks, but pointed out that what the NHTL was submitting was the same as it had submitted before, so this was why the NHTL had sent a letter rather than had requested an opportunity to appear again in person before the Committee. Substantially it was a process with which the Committee had to comply.

Mr G Selau (ANC) thanked Adv Van der Merwe. He noted that there were three areas involved. Firstly there was the consultation with the traditional leaders, which Adv Van der Merwe had just presented. The traditional leaders all agreed with the NHTL, and this seemed to be the right direction. The second area was a technical area of the letter, in which the Chairperson's effort to be proactive was viewed negatively in other quarters. However, the Committee had been able to correct that by getting the Secretary to Parliament to send it. The third issue was that of tagging, and whether the Committee was satisfied with the tagging as it was or if the people responsible for the tagging were well satisfied that the Bill was correctly tagged. He just sought clarity on the Committee's position.

The Chairperson thought that perhaps she had not commented effectively. The Committee had already complied with the issue of the letter. The Committee had already taken a decision on the tagging at a previous meeting. The only thing for which the Committee had been waiting was for the Secretary to Parliament to write the letter. This had been done. Then the Committee had had to await the NHTL's response. The Committee had thought that the response could differ from the NHTL's original submission, but it was now quite clear that it did not differ in any way. Thus all the above technical problems had been complied with. However, Members still had the right to comment.

Mr X Mabasa (ANC) proposed a 30-minute break so that Members could confer with their party colleagues in caucus with a view to the Committee's adopting a report that it agreed to the Bill. This was especially important, as the Bill still had to be referred to the National Council of Provinces (NCOP).

Mr N Gcwabaza (ANC) appreciated Adv Van der Merwe's input. He had looked at the NHTL's letter, and was assisted by Adv Van der Merwe's input. There did not seem to be a suggestion from the NHTL that there be any material change or amendment to the Bill. As a matter of fact, the NHTL agreed almost completely with the work that the Committee had done. The exception was the last paragraph referring to the National Trust. He referred to Clause 3, Section 28D(3), mentioned in that paragraph. He said that all of that concern was covered. He therefore proposed that the Committee adopt this recommendation as put before it, so that the passage of this Bill could take effect immediately so as to avoid any further delay.

Dr James objected that the Committee could not complete this matter in 30 minutes. The legal implications of what the Committee was doing were quite serious. This discussion should be rescheduled and the Committee should postpone its decision. He pointed out that this Bill amended the Performers' Protection Act (No. 11 of 1967), the Copyright Act (No. 98 of 1978), and the Trade Marks Act (No. 194 of 1993) and the Designs Act (No. 195 of 1993), and amalgamated them into a single piece of legislation. To make intellectual property part of copyright protection meant that one could obtain copyright protection only for a limited period of time. On the other hand, what one wanted to achieve was to protect indigenous knowledge for perpetuity. This was a massive issue. It was clear that the NHTL had not exercised its mind. He proposed a consideration of all the implications of what the Committee was doing. This required serious legal consideration. Such could not be done in 30 minutes.

The Chairperson had refrained from interrupting Dr James out of courtesy. However, she asserted that the Committee had long since passed that stage. Furthermore, the Committee had to confine itself to the President's reservations, not reopen discussion on the substance of the Bill. This was now the fourth meeting. At the first meeting the question was whether this Bill was a Money Bill per se. At the second meeting the Committee had concurred with the President's view that this Bill was not a Money Bill, and therefore did not fall under Section 77. Further, after the Joint Tagging Mechanism (JTM) had advised the Committee, further to the issue which the President had also raised, the Committee agreed that the Bill's provisions did substantially affect matters listed in Schedule 4 of the Constitution. That was something that the Committee had not tackled previously but which the President now asked the Committee to tackle in so far as the Bill should have been tagged Section 76. The Committee had therefore agreed to send the Bill back to the National Assembly and Members were in the House when the House adopted unanimously that the Bill be submitted to the JTM for reconsideration of its classification and only thereafter be referred to the NHTL. What the Committee had here was the NHTL's response, which could have differed but did not. The Committee had complied with that technicality.

However, as in the past, when the Committee received a report-back on a Bill, it would not vote the same day, but instead defer the vote to a later meeting. The Committee would meet on Thursday, 02 May at 09h45 (venue and time to be confirmed) which would b sufficient time for the Members of parties which did not agree with her interpretation to confer.

The Chairperson thanked Adv Van der Merwe and asked her to be present on Thursday.

Industrial Policy Action Plan (IPAP) Draft Committee Report: consideration
The Chairperson asked Members if they had the latest draft of the Industrial Policy Action Plan (IPAP) report. She herself had not received a copy in her email. However, it appeared that some Members did have a copy. She said that the Committee would not adopt the report today. This was the first totally composite draft of the IPAP report, and it included additional material - on BHP Billiton.

Members agreed to page one.

Members agreed to page two.

Members considered page three.

The Chairperson noted that the Committee had considered the following public institutions that were invited and other stakeholders. She asked if BHP Billiton not one of those other stakeholders who were sensitive. BHP Billiton needed to be included here on page three with the National Energy Regulator of South Africa (NERSA) and the South African Local Government Association (SALGA).

Members considered page four.

The Chairperson said that this was where electricity tariffs were dealt with, but it appeared that electricity tariffs factored into the BHP Billiton input. The input was raised with BHP Billiton with respect to its low price and of course all the good work that it was doing and the fact that some of the smaller companies did not benefit from the lower prices. She was thinking of one in the Free State that had to consider closing down. Mr Radebe had referred to it at some point.

The Chairperson referred to beneficiation.

Mr G Hill-Lewis (DA) asked why the Committee was considering it if it was not the final report.

Secondly, he objected that this item was on the agenda for 02 May 2013.

The Chairperson replied that the agenda should have read, for this meeting, 'deliberate'. This draft would have been the first consolidated report with BHP Billiton. This had been the Committee's agreement on 25 April. She had wanted today to put forth the Committee's recommendations. She acknowledged that BHP Billiton was captured separately a page further on. However, it should have been integrated. This was what Members had all hoped for.

So when it came to beneficiation, for example, that paragraph might need to change somewhat, because BHP Billiton did beneficiate. However, she asked Members what kind of beneficiation they wanted. Did they want an environment in which those beneficiated received special deals? Should not all involved be considered for the same deal? Should not all those who beneficiated be given special strategic consideration? Or should it be BHP Billiton alone? If Members thought that it did not matter, the Committee could move on. She flagged that matter as it was largely beneficiation and jobs, two of the country's priorities.

Members agreed to page five.

Members considered page six.

The Chairperson pointed out that this had not changed but there was one thing that they might wish to raise – the issue of port charges about which industry and manufacturers complained. Portnet had indicated that it was going to revise the port charges for manufacturing. Eskom had indicated that there was no scope for any downward revision of its prices. 

Members agreed to page seven.

Members considered page eight. Here the Chairperson pointed out that there were some changes. It had been one of the 'clean-up' pages.

Members considered page nine.

The Chairperson said that some of the BHP Billiton matters should not just appear on one page but should be put in the context of energy itself. It was largely involved with energy jobs and beneficiation.

The Chairperson did not want the Committee Secretary, who had written that section, to appear as an unpaid public relations officer (PRO) for BHP Billiton. It seemed that he had written for BHP Billiton half the introduction to its annual report. He must be more critical.

She asked Members all to study this piece. One of the things that were not clear, though the Committee had requested it, was that the training arrangements could be perhaps be broadened to offer training to persons beyond the company's own employees.

Members agreed to page ten.

Members considered page 11.
 
The Chairperson said that there were three things here, but they were underlined. In the last bullet of the first paragraph, it was mentioned that smart-metering technology was an urgent priority with conditional localisation components through designation to improve efficiency and billing systems. It would be wise to include the examples that the Committee was given.

In the third paragraph from the bottom, through this programme, Transnet proposed that cargo charges for labour-intensive and value-added products should be reduced. 

It had become clear from a press release and public statement that Transnet had looked at this but the Committee did not have the date when the port charges would begin. She asked the Committee Secretary to verify that and put it in. 

On the fifth line, the Committee, as well as the dti, had welcomed these proposals for restructuring. Apparently Transnet's tariff structure was shared between shipping lines, cargo owners, and tenants. Transnet now intended to restructure its tariff arrangements.

The World Economic Forum (WEF) would take place from 08-10 May in Cape Town, on the theme of delivering on Africa’s promise. There was to be a focus on agriculture and green products.

She referred to the proposed conclusion. She noted that Billiton had been included, but not the changed dates.

The Chairperson asked for Members’ revised or new recommendations.

Secondly, some of the recommendations might be more suitable for inclusion in the conclusion. She asked for Members' broad comments, positive or negative.

Mr Hill-Lewis wanted to work on the wording of a recommendation and send it to the Committee Secretary.

The Chairperson agreed but wanted to hear his recommendation first.

Mr Hill-Lewis said that it was very clear that the different departments and state-owned enterprises (SOEs) did not work enough in alignment and cooperation with one another. So while the dti was desperate to mitigate the effects of administered prices, in, for example, port charges, there was a profound lack of coordination with Transnet. He recommended the formation of an interdepartmental committee at the very highest level with the ministers and chief executive officers of all the departments and SOEs involved in administered prices. This would include the dti, the Department of Energy, the Department of Transport, Transnet, Eskom, and perhaps some others.           

Dr James added that the international precedent for what Mr Hill-Lewis had recommended was the concept of a cost-reduction 'caucus'. There was certainly one in the Netherlands. There was also one in Germany. In this way all the stakeholders got together in the caucus and considered ways to keep costs as low as possible and developing strategies accordingly.

Mr Mabasa suggested including the Economic Development Department (EDD) in the picture.

He commented that small and medium enterprises (SMMEs) and cooperatives should be utilised as a tool to the benefit of the IPAP.

Dr James recalled the public hearings in which a recurring theme, summarised on page three, was administered price hikes, as well as skill shortages, low productivity, and a perceived restrictive labour environment. The Committee should recommend that the National Economic Development and Labour Council (Nedlac) should become far more effective and efficient. Also Nedlac's role and structure and its funding required some investigation in order to make it far more effective in dealing with these questions on skill shortages, productivity level and the labour environment.

The Chairperson thought that 'caucus' might not be the word and suggested a forum for cost-reduction.

She asked Mr Hill-Lewis to reword slightly his recommendation on an interdepartmental committee to include the idea of a forum and broaden it to include also the SOEs.

She asked Members to consider whether there should be a separate interdepartmental committee with a bigger forum alongside it or if there should be one body.

Mr Gcwabaza proposed that a mechanism be found - he did not know about the structure - through which all sectors that were giving rise to increases in administered prices be investigated urgently so that further reductions of administered prices be informed by sectoral evidence. This would include not just electricity but water as well. Outdated infrastructure and the distance between the supplier and the consumer further increased the administered prices It was also necessary to investigate the extent to which forms of renewable energy could immediately be put in place. This would also help the reductions of administered prices while one battled over the issue of nuclear energy.

Mr Hill-Lewis said that his recommendation included ministers and, crucially, the CEOs of SOEs, who were responsible for levying these administered prices.

The Chairperson said that Members must consider carefully what they would call this interdepartmental committee. 

The Chairperson said that Members had also been asked to consider the principle of cost reduction. It might relate to what Mr Gcwabaza had just pointed out, that one should not just be thinking in terms of electricity. All of these were factors and contributed to the input cost, which then negatively impacted on the output cost.

The Committee in these engagements had also spoken much about skills. No matter what one read these days, one heard the same two things – the need for jobs but also strategic skilling of people done in a faster manner. One could not wait five or seven years for engineers. One needed to be able to develop these skills in other ways and consider the concept of working through technikons and companies that did have training facilities and letting government work with the private sector to expand those training facilities. One could not expect a small workshop to have such facilities but one could expect a large company like Billiton.

Members should send their final recommendations to the Committee Secretary to be considered the next day.

What had the Committee learned that could take it forward. Was there any single issue?

Secondly were there any other areas?

Thirdly, the issue right now was that there was an energy crisis. This was a reality. The reason for it was that we were committed to industrialisation. It had to be asked what the Committee could put in its report to assist the leadership in government and in the private sector to change the way it was doing things.

She was not looking for ideological statements but real information.

Mr Mabasa said that another possible recommendation was that Eskom and other energy stakeholders explore lessons from other countries and other industries with the effect of saving energy consumption. He gave the example of where one entered certain public spaces and automatically the light was switched on and, if there was nobody there, the light was switched off. If adopted on a national scale, it could make a big difference.

The Chairperson noted much innovative thinking coming to the fore.  

She noted that Mr Gcwabaza had raised again this morning the issue of water and it had been discussed in a meeting of the Committee some months before in which there had been discussion of the agro industry, an industry that should not be forgotten. There was a tendency for government to embark on massive projects, for example, a huge dam. Such a project would take as long as seven years, during which potential beneficiaries would have to wait patiently. Such a large project took a long time because of the time needed to bring together the financial resources and do the planning. If on the other hand one promoted scientific innovation, one could build instead perhaps four smaller dams, use more labour, and people would benefit far earlier, possibly within one year at the latest from one of the dams. It was commendable to bring the producers, suppliers and the consumers together. Should one not also review that in our planning and try to align some of the work that the Committee had already done more closely instead of trying to reinvent the wheel? Was it not possible to develop small mills everywhere? Then these smaller mills could then use renewable energy. Thus the Committee could factor into its conclusion at least a consideration of reviewing again the Committee's approach to working only on the large infrastructure and instead also promote smaller infrastructure with a view to decentralisation of some of it.

Mr Gcwabaza said that there was a very healthy conversation between the government and the general population. However, what seemed to be missing was a sense of urgency. A way must be found to develop this sense of urgency between both government and business so that small projects that could immediately be carried out in areas that could allow us immediately to alleviate the challenge of administered prices, for example. It was not enough just to talk about the matter. This was a point that the Committee should make in its report. It was urgent, as unemployment was rising. Inequality and poverty were rife. All of us must hit the ground running. How far had the Committee gone to unpack the process that it had identified?

The Chairperson appreciated Mr Gcwabaza's holistic comment, which she believed should be factored into the Committee's conclusion.

The Chairperson hoped that there would be no major changes on Thursday. If Members did not broadly agree, the Committee Secretary needed to know now, so that the Committee staff could work on the report. She had the impression that Members broadly agreed.
Mr Hill-Lewis recommended that there needed to be a fundamental discussion with the National Treasury and the Department of Cooperative Governance and Traditional Affairs on the funding of local government and the extent to which municipalities were charging exorbitant electricity surcharges to raise revenue. There also needed to be a more in-depth discussion on the idea developmental pricing in regard to SOEs, which had monopolies in certain industries such as electricity generation.

The Chairperson agreed that both those recommendations should be factored in.

Any further recommendations, or further technical comments, from Members should be sent in today.

The Chairperson thanked the Members and Committee staff and adjourned the meeting.                                                      
Apologies:                        
The Chairperson noted apologies from Ms S van der Merwe (ANC), Mr B Radebe (ANC), and Mr G McIntosch (COPE). Mr Radebe’s apology was qualified, as he was in a Whippery meeting but could come to the meeting if called upon to vote.
 

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