Committee Reports on Intellectual Property Laws Amendment Bill; Industrial Policy Action Plan with reference to state of Manufacturing Sector

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Trade and Industry

01 May 2013
Chairperson: Ms J Fubbs (ANC)
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Meeting Summary

President Zuma had referred the Intellectual Property Laws Amendment Bill back to the National Assembly in September 2012 for reconsideration. He believed it might not be constitutional on the grounds that the Bill ought to have been referred to the National House of Traditional Leaders as required by Section 18 of the Traditional Leadership and Governance Framework Act, 2003. Secondly, provisions of the Bill affected certain matters listed in Schedule 4 of the Constitution and should therefore be dealt with in terms of Section 76 of the Constitution. The Portfolio Committee on Trade and Industry had deliberated on the Bill and obtained legal opinions. It met today to adopt its Committee Report on the Bill.

The Democratic Alliance argued that the National House of Traditional Leaders (NHTL) comments provided in April 2013 were of poor quality and that the NHTL had not applied its mind to the matter. The DA therefore suggested that the Bill not be adopted and that the introduced Private Member’s Bill on Protection of Traditional Knowledge (submitted by Dr W James of the DA) be considered instead of the Intellectual Property Laws Amendment Bill. The Committee was split on whether to adopt the Amendment Bill. Some Members argued strongly that the NHTL was an institution which had the right to practise its autonomy on any matters brought before it, and that the Committee had to respect that institution. Others noted that the Bill had been delayed many times and should be adopted immediately.

The Parliamentary Legal Advisor was called in to give a legal opinion on what the implications would be of postponing the finalisation of the Bill. She referred Members to the Traditional Leaders Governance Framework Act which stated that the NHTL had 30 days to make recommendations on any Bill referred to it. With regard to Section 18, there was no duty on the NHTL to make any comments on a Bill referred to it. They had discretion about whether they want to make comments or not. As for procedure, she cautioned however the Committee to accept that the letter received from the NHTL was not done in the proper fashion. It was not of parliaments concern whether the NHTL added comments or not. However if the NHTL did not follow procedure in any way, the Committee should raise the matter as a serious concern.

Members agreed with the Parliamentary Legal Advisor and opted to finalise the process concerning the Bill. However some Members still felt strongly that by finalising the adoption of the Bill, the Committee was accepting poor quality work from the NHTL. The Chairperson ruled for the adoption of the Committee Report and this was done.

For the Committee Report on Implementation of the Industrial Policy Action Plan, the Chairperson said that not enough information had been received on the matter and therefore the report would not be adopted. There was discussion on the Report's recommendations submitted by Members, which were classified as Conclusions instead. Members raised questions, mostly about the effectiveness of regulatory bodies in the manufacturing sector, the role of State Owned Enterprises (SOEs) in providing funding for small manufacturing entities. Members agreed that there was no need for the establishment of a new regulatory body as these were costly. However, the mandate of these regulatory bodies needed to be guided. Also emphasised was that exorbitant fees charged by municipalities was killing the manufacturing sector and causing job losses.

Meeting report

Formal consideration of Committee Report on Intellectual Property Laws Amendment Bill

The Chairperson suggested that in the interest of time, Members discuss only the Recommendations and the Conclusion. She pointed out that not all Members' recommendations had been added to the report.

Members were reminded that in the previous meetings, the Intellectual Property Laws Amendment Bill was referred back to the Committee by the National House of Traditional Leaders (NHTL) after it had been requested to comment on the Bill.

A letter had been received from Dr W James (DA) about the Democratic Alliance's position on the NHTL. It stated that the changes submitted by NHTL in 2013 were not materially different from its initial submission in 2010. Therefore Dr James wondered whether the NHTL had met to deliberate on the Bill; if so, proof of such a meeting needed to be submitted to the Committee. The DA letter was distributed to all committee members. It requested that Members postpone the decision by the Committee to approve the Bill without amendment, scheduled for the 2 May 2013, until clarity on the procedural matter was received from the NHTL. The Chairperson handed over to the Parliamentary Legal Advisor to outline to the Committee whether there were any legal issues which bound the Committee to not making a ruling on the Bill.

Adv Charmaine van der Merwe, Senior Parliamentary Legal Advisor, referred Members to Section 18 of the Traditional Leaders Governance Framework Act, which states that the NHTL had 30 days to make recommendations on any Bill referred to it. Reading Section 18, there was no duty on the NHTL to make comments on a Bill. They had a discretion on whether to make comments or not. As for procedure, she cautioned the Committee about accepting the NHTL letter if it was not done in the proper fashion. It was not Parliament's concern whether the NHTL added comments or not. However if the NHTL did not follow procedure in any way, the Committee should raise the matter as a serious concern. With respect to the Private Members Bill, and whether the Committee should postpone its ruling on the matter, the Committee was not legally required to stop proceedings. However the Committee should keep in mind that the Bill was from 2010. Due to interpretation concerns between the Office of the State Advisor and the Council of the President, the Committee had been given five months to re-consider the Bill. This meant that the Bill had been delayed considerably as a result of external matters. The Committee was warned to keep the lengthy delay in mind when making a decision to postpone its ruling on the Bill.

Discussion
M X Mabasa (ANC) thanked Adv van der Merwe for her input and said that he agreed with her interpretation of the matter. Different constitutional bodies should be allowed to exercise their duties autonomously. What the Committee should address were issues of procedure. However it would not be right for the Committee to question the work of the NHTL. He proposed that the Bill be passed in the meeting.

Mr G Selau (ANC) raised two issues. One was that the newly introduced Private Member’s Bill on Protection of Traditional Knowledge was intended to stop this Bill which had already been submitted to the President. This did not sound proper. The newly introduced Private Member’s Bill would be considered by the Committee at a later stage; however the Bill under discussion should be adopted by the Committee. The second issue was that of the processes of the NHTL, which to the Committee’s understanding, which represented all traditional leaders nationally. The Committee should therefore be careful not to tread on areas where it was not supposed to, such as questioning the diligence of that House.

Dr W James (DA) said the Committee needed to consider both procedural aspects as well as the quality of the work submitted to it. In terms of the requirements of the President, it was that the NHTL exercise its mind when dealing with legislation. It was clear that the NHTL did not meet to discuss the Bill. No quality input had been received from the NHTL. Therefore the current Bill under discussion was an inferior piece of legislation on property rights. Internally, the Bill was embarrassing in terms of quality.

Mr B Radebe (ANC) said that it was worrying when Mr M Oriani-Ambrosini (IFP)(Alt) raised issues about the NTLH seeing that he did not belong to any traditional house and did not understand the traditional processes within these communities. Previously colonisers attacked traditional leaders, and it was worrying that the traditional community was still being attacked even today. He did not understand how an individual could cast suspicion on the NHTL because it did not understand how it worked. Anyone who questioned the NHTL, did not understand African procedures. The NHTL needed to be protected and respected by modern communities. The Private Member's Bill would be considered by the Committee at the right time.

The Chairperson thanked Adv van der Merwe and Members for their contributions. She said that it was difficult for her to make a ruling on the matter, but on the other hand it was very easy. One did want to ensure that consensus was reached on the matter. She added that there was no doubt that the Bill would be improved over time. She persuaded Members who were not ready to accept the procedure as it stood - that there was a need to proceed. Questioning procedures which took place in other bodies should be done with caution. Each house had its rules and procedures as outlined by the Constitution. The proceedings would therefore continue as scheduled.

The Chairperson read out the Report of the Portfolio Committee on Trade and Industry on Intellectual Property Amendments Bill which was considered according to the Resolution of the National Assembly adopted in March 2013. The Joint Tagging Mechanism advised that the Bill did not fall under Section 77, but under Section 76 of the Constitution. In a letter dated 10 April 2013 the NHTL submitted its comments on the Bill in accordance with Section 18(1) of the Traditional Leaders and Governance Framework Act 2003. The Committee having considered the comments of the NHTL on the matter agreed that the subject of the comments did not materially differ from those submitted on 20 October 2010. The Report was tabled to Members for adoption. Mr Radebe moved for the adoption of the report, and was seconded by Mr Mabasa. The Chairperson asked whether the report would be adopted without any amendments. Members agreed that the report would be adopted without any amendments.

The Chairperson asked whether there were any objections and comments.

Dr James objected to the adoption of the report. He argued that by adopting the report, the Committee was proceeding without any quality comment from the NHTL.

The Chairperson advised Dr James to rather say “he believed that no quality input was made by the NHTL” because he did not know this as a fact.

Mr G Hill-Lewis (DA) said that if the Committee was going to adopt the report, the language used should be corrected. He referred to paragraph 4 of the report and said that the first sentence was incorrect and needed to be revised.

The Chairperson released Mr Radebe and Mr Mabaso to go to other meetings.

Committee Report on Implementation of Industrial Policy Action Plan with specific reference to state of the Manufacturing Sector
The Chairperson said that not enough information had been received on the matter and therefore the report would not be adopted. She said that recommendations made by Members had not been not captured.

Mr Hill-Lewis noted that the recommendations he made had been captured under the Conclusion. He then asked what the difference was in the status of a conclusion and that of a recommendation.

The Chairperson responded that she also questioned that and asked Members to look at the Conclusion. She referred to 6.1 and said that it was important not to have a shopping list of recommendations; otherwise most would not be considered for implementation. Members were asked to highlight recommendations they considered to be important. It was suggested that recommendations be grouped together according to similarity.

Mr Hill-Lewis said that he was not happy with 6.6 where the Committee recommended that workshops be held with key role-players. He argued that the section which was put under ‘Conclusion’ be moved back to ‘Recommendations’.

The Chairperson agreed. She added that engagements between National Treasury and the Department of Cooperative Governance and Traditional Affairs (COGTA) were crucial to discuss funding options for local government as well as the extent to which municipalities were charging exorbitant fees for electricity.

Mr Selau said the essence of the last sentence of 6.6 was covered by 8.1.

The Chairperson said that the way Mr Selau was looking at it was the correct one. There was however a need to look at funding and reducing costs. She asked whether the Committee wanted to relay that municipalities were charging exorbitant fees and this resulted in plenty of job losses. Measures should be taken to do away with these job losses. Municipalities therefore needed to take into account the impact that exorbitant fees had on manufacturing which led to job losses. Some municipalities were using these industries as cash cows.

The Committee Secretary said that in 6.6 the Committee could not recommend to Parliament that there be a colloquium as that was an internal process. The Committee however could make a decision on the matter. COGTA was under another jurisdiction and so the Committee needed to be careful about the recommendations it made to it.

Mr Hill-Lewis said that all Members were in agreement about the problem. The essence of the recommendation was therefore to note the crisis/ problem for discussion. He agreed with the Committee Secretary that the Committee could not instruct the House to agree that the Committee have a colloquium, as the Committee could do that for themselves. The matter could just remain as a conclusion.

The Chairperson asked about 6.8 and whether it should not be a recommendation, seeing that Members were asking for a principle to be adopted. It should be noted in the conclusion that the Committee engaged with Transnet about its administered prices and they agreed to revise their fee structure. BHB Billiton was asked to expend their training mechanisms to other smaller manufacturing sectors with the support of the public sector. There was also a need for parastatals and State Owned Enterprises (SOEs) to jump in on the matter of funding as well.

Mr Selau responded to the matter on SOEs that the National Energy Regulator of South Africa (NERSA) was a regulatory body which dealt with the regulatory environment and developmental pricing regime.

The Chairperson responded that there was no regulatory regime for the pricing administration costs. NERSA was widely accepted as a regulator for electricity.

Mr Hill-Lewis responded that there issue was not whether there was a regulatory body or not, because these bodies are in place. Rather the fundamental issues of discussion should be around the mandates of these regulatory bodies. The debate was around what the adequate rate of returns should be.

The Chairperson said that it was unfortunate that the Committee did not have the bulletin for discussion. She asked the consultants present to provide input on the matter.

Mr Abdul Waheed Patel, Managing Director, Ethicore Political Consulting responded that they had tried to contact the Chairman’s office. A response was that they would send through the bulletin to the Committee Secretary later in the morning. The concerns of the Committee were raised to the office.

The Chairperson said that the bulletin from the Chairman’s office was due on Tuesday (30 April 2013). What the Committee could do was to look at the conclusion and make any changes. The objective was to try and bring about an enabling regulatory environment which would be conducive to the manufacturing sector. The private sector as well as the public sector would be engaged in the matter in an attempt to come up with relevant solutions. Another factor was that there were not enough skills in the sector and there were no training mechanisms in place. The transport environments, as well as the electricity sector were also factors which were looked at by the Committee. The volatility of the currency was also raised as a concern. There was also a total lack of alignment among stakeholders. She then asked whether there were not too many forums, was the National Economic Development and Labour Council (NEDLAC) not enough. What were the motivations to establish more forums? Establishment of these costs a lot of money.

Mr Selau agreed with the Chairperson and said that the Committee had ‘homework’ on the matter of transport. What was the transport for? What type of transport was the Committee considering? Air, land or railway transport?

Mr Hill-Lewis referred the Committee back to 8.6 and said that it needed to be revised.

The Chairperson said that the Industrial Policy Action Plant (IPAP) presides over the matters raised by the Committee such as transport. IPAP would therefore bring together the relevant departments to drive alignment within them to reach agreed upon priorities. Departments should therefore be encouraged to bring about alignment.

Mr Selau responded that the Committee should rather drive the processes of alignment.

The Chairperson said the full report should be submitted electronically so that it would be adopted on Friday (2 May 2013). Members who had other recommendations should submit them to her before the finalisation of the report.

Mr Hill-Lewis said that the colloquium process had been very useful, and he thanked the Chairperson for initiating it. He suggested that the Chairperson continue to initiate it in the coming years as it was very useful.

The Chairperson responded and said that it was the Members who should be thanked for their robust engagement and the fact that the large entities such as Trasnet and Eskom also availed themselves for discussion and interaction. IPAP was the main mandate of the Committee. She reminded Members of the budget vote on 15 May 2013.

The meeting was adjourned.

Appendix 1:
Report of the Portfolio Committee on Trade and Industry on the Intellectual Property Laws Amendment Bill, dated 2 May 2013


The Portfolio Committee on Trade and Industry, having reconsidered the Intellectual Property Laws Amendment Bill [B 8B-2010] (the “Bill”) referred to it by resolution of the National Assembly adopted on 14 March 2013 (Announcements, Tablings and Committee Reports, 15 March 2013), and reclassified by the Joint Tagging Mechanism (JTM) as a section 76 Bill, reports as follows:

1. In the committee’s report dated 6 March 2013 (Announcements, Tablings and Committee Reports, dated 6 March 2013), the committee concurred with the President’s views that the Bill is not a Money Bill and therefore does not fall under section 77 of the Constitution, 1996, and further, after having been advised by the JTM, agrees that provisions of the Bill substantially affect certain matters listed in Schedule 4 of the Constitution, in particular traditional leadership and cultural matters, and should therefore be dealt with in terms of the section 76 of the Constitution.

2. By resolution of the National Assembly adopted on 14 March 2013, the Intellectual Property Laws Amendment Bill [B 8B – 2010] was submitted to the JTM for reconsideration of its classification, and would be referred to the National House of Traditional Leaders (NHTL) for comment

(Announcements, Tablings and Committee Reports, 18 March 2013). 3. In a letter dated 10 April 2013, the NHTL submitted its comments on the Bill for consideration by the committee in accordance with section 18(1) of the Traditional Leadership and Governance Framework Act, 2003, Act No. 41 of 2003.

4. The committee, having considered the comments of the NHTL, is of the opinion that the substance of the comments received from the NHTL does not materially differ from the original comments presented to the committee on 20 October 2010 and accordingly is satisfied that it has duly considered all comments made by the NHTL.

5. After deliberations, the committee recommends that the Bill is adopted without amendment. The DA objected.

Report to be considered.

Appendix 2: Statement by Wilmot James, DA Shadow Minister of Trade and Industry, on submission of Private Member’s Bill on protection of traditional knowledge (06/03/2013)

Yesterday I submitted a Private Members’ Bill, titled the Protection of Traditional Knowledge Bill, to the Office of Speaker Max Sisulu. The Bill was drawn up as an alternative to the fatally flawed and internationally embarrassing Intellectual Property Laws Amendment Bill that President Jacob Zuma recently returned to Parliament because of some major procedural shortcomings.

This Bill will:
Provide how intellectual property rights will be protected;
Determine what is eligible for traditional knowledge intellectual property right protection;
Provide ownership definitions for traditional knowledge intellectual property rights; and
Provide for the duration, nature and scope of the traditional knowledge intellectual property rights.
The Bill will also provide for the establishment of a National Register of Traditional Knowledge as well as a National Council and National Trust and trust fund in respect of traditional knowledge.

As the DA argued when the issue of protecting innovations in traditional knowledge first came before Parliament, it will be best for South Africa to have a dedicated, or sui generis, piece of legislation. International best practice relating to the intellectual property rights for information technology and software development has set a precedent for this type of legislation.

Dedicated legislation is necessary because the legislative protection of indigenous knowledge is novel in nature and different in purpose and scope from other forms of existing intellectual property. It would therefore be inappropriate to try to integrate it into existing intellectual property laws, as the Department of Trade & Industry tried to do with its ill-advised Intellectual Property Laws Amendment Bill.
 
The Protection of Traditional Knowledge Bill, in line with international precedent and the recommendations of the World Intellectual Property Organisation, therefore constitutes the sui generis legislation that will provide robust protection to different categories of indigenous knowledge. It will serve our country much better than the flawed Intellectual Property Laws Amendment Bill.

As required by Rules 241(1) and 241(2) of the National Assembly, I have given notice that I intend introducing the Protection of Traditional Knowledge Bill in the National Assembly shortly, and have submitted a full draft of the Bill and covering Memorandum to the Speaker to be publicized in the Government Gazette for public comment.

 

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