Performer's Protection Bill briefing

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Trade and Industry

11 November 2016
Chairperson: Mr A Williams (ANC) (Acting)
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Meeting Summary

The Department of Trade and Industry (Dti) presented the Performers’ Protection Bill, which was aimed at filling the gaps in previous legislation that did not provide for the regulation of collecting societies, the standardisation of contracts, economic and moral rights for actors and the right of fair use and re-use of creative material. 122 written submissions had been received from stakeholders, with the music industry being in support of the bill, while other stakeholders such as publishers were opposed to it.

Members asked about provision for royalties to be paid to beneficiaries of deceased artists. What had been the aims of introducing this bill? Had the Dti put measures in place to monitor the compliance and implementation of this legislation? Clarity was sought on the divisions of intellectual property; whether Parliament had ratified the Beijing Treaty on Audiovisual Performance, and its legality; the categories of related rights and whether story-tellers and puppeteers were part of the actors; the reproduction of material for educational purposes by teachers that was sold to broadcasters like the SABC; the rights of indigenous communities in the context of South Africa, and whether the Khoisan people and the phonographs of their “clicking sounds” were incorporated into the bill. Had Etv, ANN7 and DSTV agreed to it? Why had the Department not followed the NEDLAC process in dealing with this bill?

Meeting report

Mr MacDonald Netshitenzhe, Acting Deputy Director-General, Department of Trade and Industry (DTI) gave the background to the Performers’ Protection Act, which deals with people in the entertainment area. This was in the field of copyright and related rights. Intellectual property covered patents, trademarks, designs and copyrights. In South Africa, copyrights fell under the DTI.

In 2013, a draft policy on intellectual property rights was developed. 122 submissions were received and analysed, with advice received from the Farlam Commission regarding the management of copyright issues. The collecting societies were formalised by the 2002 amendments that dealt with ‘needle time’, which is a royalty -- each time a song is played, royalties were owed to the musicians.

This Bill provided for the regulation of collecting societies. There were international treaties that were peculiar to the entertainment industry, such as the Rome Convention, which was different to the Rome Statute of the International Criminal Court. It had that name because it was concluded in Rome. It was concluded by the International Labour Organisation (ILO) because of the performers. South Africa was not a member to this treaty at the moment because the empirical studies of benefits had not yet been conducted.

One of the recommendations of the Farlam Commission had been that contracts must be dealt with to ensure that broadcasters did not benefit more than the artists themselves who, as it stood, received the bare minimum from their contracts.

Ms Mashendri Padayachy, Deputy Director: Consumer and Corporate Regulation Division (CCRD), spoke about the rights of artists in their performances. This included music producers, and broadcasters of radio and television programmes. The legislation was being amended on the basis of the Copyright Review report. This area had come under the spotlight when the cast of the TV  series “Generations” was fired, and had made the Department look into the entertainment industry and the protection of actors and musicians in audio-visual performances.

The international treaty that the Performers’ Protection bill specifically focused on was the Beijing Treaty on Audiovisual Performances, which was a multilateral treaty which gave performing artists economic and moral rights. The Department intended taking this treaty into the bill, and acceding to it.

There were three categories of rights holders: the performers, which were the actors, musicians and dancers; the producers of sound recordings; and the broadcasting organisations.

Live performances were a key and principal means of generating income. The Act currently restricts this form of income, and that was why it was being amended. It also did not provide for the digital world, as many things were now being downloaded from the internet. This affected the performers, because their income was generated through those means.

The Department was the custodian of all intellectual property and had realised that many people in the copyright industry were dying as paupers because their royalties were not being paid. Dispute resolution in the area was not accessible, because it was expensive. The recording companies were the only ones who were currently able to access the courts and afford legal representation. The Act was being amended to include an Intellectual Property and Copyrights Tribunal to look at all issues of intellectual property and afford musicians access to dispute resolution. The Department was also aware that there was a lack of education and awareness, and a rigorous education and awareness programme was needed to educate communities on their intellectual rights and copyrights.

The Department wanted to formulate a legal framework that would include all flexibilities and advancements in the digital space. It would also deal with the licensing of copyrights. This would extend beyond the music industry.

Ms Nkonyane, Chief Director: Monitoring and Evaluation and Socio-Economic Impact Assessment System, DTI, presented on the impact assessment and said that the process had been conducted to look at the designated group and benefits related to those groups, changing behaviour and mechanisms to look at changing behaviour, the implementation costs, budget and staffing requirements, compliance and risk management and social cohesion.

The groups that were identified to be the main beneficiaries of the Act were performers, producers and indigenous communities. The groups that were expected to incur costs were the Department, and the public in the establishment of the tribunal. The Act would facilitate processes for fair use and dealings that would provide the public and communities with access to the knowledge required to build and sustain communities. In terms of security, the Department had realised that the fair use provisions would also provide legal certainty to those who used protected works and curb the infringement of copyright works, and economic growth and investment in the form of rewarding performers would encourage innovation and investment in the industry. The economic inclusion of copyright management would offer the platform for small scale performers to get recognition for their work. The registration of collecting societies to receive royalties served as an incentive for performers to enter into the mainstream economy and reap the benefits from it.

The bill would also deal with the re-use of broadcast works such as “Isidingo” and “Generations”, which were repeated three times a week. The artist or performer was entitled to royalties. The local television shows were being sold overseas, and aired by the airlines, which was a form of re-use. The public consultations suggested a private copyright levy for publishers and makers of sound recordings. Payments taken from this could be pumped into the creative industry to develop it.

The copyright amendment bill dealt a lot with the collective management. South Africa had no collecting society for actors, who had to rely on their contracts. When the Department had assessed the contracts of the three broadcasters, it had been shocked to realise that all the intellectual property was signed away in perpetuity. It was a ‘take it or leave it’ situation. Actors had only performance rights, but no copyrights.

The amendment bill sought to establish a collecting society, a first in the country that would provide for audio-visual performers, based on the Beijing Treaty. There would be one collecting society per set of performers. Each society would have to be registered with the Companies and Intellectual Property Commission (CIPC), and all collecting societies would be allowed to collect only for their registered members. This was because collecting societies had this practice of distributing revenues that did not belong to them or their members. The issue of reciprocal rights provided that if South African artists were not paid what was due to them by international organisations, then the country would also withhold money due to its artists.

The minimum contract standards were a problem, especially in the recording industry. The split of royalties between a performer and the recording company would be equitable, and what was meant by this was that it would be a fifty per cent split. It became a bit tricky when it came to actors, and here the collecting societies would serve as a guide.

The bill would have the right of “making available.” This was a new right which was very successful currently in China, Japan and Argentina. It would also have the right of reproduction and rental when works were reproduced, and also the right of authorisation of who may use one’s work wirelessly. Performers would be given moral rights, which meant that their image may not be distorted or used in a manner that the performer did not agree with.

Artists in South Africa were in a very weak bargaining position. It was a tough industry, and the Department believed that the legislation would be a step forward in helping artists to benefit from their craft. The entertainment industry contributed greatly towards the country’s gross domestic product (GDP), and the percentage increased each year. The legislation was also aligned with the Dti requirements.

Mr Netshitenzhe concluded by saying that the business community, especially the publishers, were not in favour of the collecting societies collecting the royalties. The issue of the re-sale rights was also a concern, because when items were re-sold at an increased value, the original owner did not receive anything. In the European Union, they had employed a sliding scale to determine what percentage the original owner would receive. The business community in South Africa was not in favour of this proposal. The Indigenous Knowledge Act dealt with the folklore, and this bill also spoke to this.

Discussion

Ms S van Schalkwyk (ANC) asked for a brief summary of the 122 written submissions. Did the Department make provision for royalties to be paid to beneficiaries of deceased artists? What were the aims of introducing this bill? Had the department put measures in place to monitor the compliance with, and implementation of, this legislation?

Ms P Mantashe (ANC) said that the proposal was beneficial to the public, but compliance and enforcement was a serious issue. Did the Department have capacity to enforce the bill, and if it did, what were the consequences for non-compliance?

Mr B Mkongi (ANC) asked about the divisions of intellectual property, the Beijing Treaty on Audio-Visual Performance, whether Parliament had ratified the treaty and its legality, the categories of related rights and whether story-tellers and puppeteers were part of the actors, and reproduction for educational purposes by teachers, which was sold to broadcasters like the SABC. He asked about the rights of indigenous communities in the context of South Africa, and whether the Khoisan people and the phongraph were incorporated into the bill. The clicking sound in South Africa came from that community and was part of phongraph, so what was their plight in terms of this bill? Had Etv, ANN7 and DSTV agreed to this bill?

The Chairperson said that the bill was a good initiative. The entertainment industry contributed 4.8% towards the GDP and the profit from that did not go to the artists, which meant that someone who was objecting to the bill was obviously making a huge amount of money from the performers. Was the 50/50 split an international standard? Everyone must be covered by the legislation.

Mr Netshitenzhe responded that the treaty ratification issue was not a matter that was dealt with by the Department, but by Parliament. Ratification takes place after it has been established that the treaty serves the interests of the country. Ratification attracted international obligations, so must be treated carefully.

Puppeteers would be covered in the bill. The issue of folklore, which included the clicking sound of the Khoisan, was covered by the Indigenous Knowledge Act. He asked the Committee to engage with the Department of Arts and Culture and the Department of Science and Technology about what was happening in the amendment bills that they were being considered by the two committees.

He said that the issue of categories of industrial property rights were design, patent, trademark and copyright.  Section 9(a) provided the lifespan of a copyright. It stated that the beneficiaries of a will would benefit from the 50-year copyright lifespan after the death of a performer, and would receive these benefits as they became due to them.

The enforcement and monitoring capacity, education and awareness were indeed issues of concern. Generally a period of five years was given to see if a piece of legislation was effective or not. This was no longer the case, because of the urgency of the matter at hand. The implementation plan would be in place to ensure proper enforcement.

Ms Mantashe asked if consultations with stakeholders had taken place.

Mr Netshitenzhe said that the Department had consulted widely, and the 122 written submissions that Ms Van Schalkwyk had requested would show who had responded on various issues. The Bill had not gone through the National Economic Development and Labour Council (NEDLAC) process but the department had met with the convenors and the labour federations, and the issues had been addressed. Many were for the bill, but a few of them, like the publishers, were against the bill.

Ms Van Schalkwyk commented that the NEDLAC process was still necessary to formalise it.

The Chairperson said that the Department should write a letter explaining why the bill had not gone to NEDLAC.

Mr Netshitenzhe said that they would do so in writing. It had been an omission on the part of the internal processes. The Department had a convener of government who decides which bills should go to NEDLAC. The convener met with the other conveners of business and labour to remedy the situation.

Ms Padayachy said that the summary of the written submission ran into more than 1 000 pages, but would be made available to the Committee. The previous legislation had had a gap that did not allow for the payment of royalties. This gap had since been closed by Section 9(a). A presidential task team on the creative industry, led by Mr Buti Manamela, Deputy Minister in the Presidency, was working with the Department from a monitoring perspective. There had been meetings within the industry, which had been anticipating the changes following the report in 2011. Collective societies were already aligning themselves in anticipation of the bill.

The payment of royalties by the SABC had been dealt with by a task team comprised of the Department of Communications, the Dti and the Department of Arts and Culture, which had put pressure on the broadcaster to pay royalties. The Dti was working with the Hawks on criminal sanctions for non-compliance. Collecting societies that did not comply would not be accredited. The fair use provision would address the re-use of intellectual property for educational purposes.

The cyber inspections would be strengthened. DSTV had responded to say that the law must be changed, and it would comply. ETV had agreed to the standardised contracts for actors. Recording companies did not mind giving in to the 50/50 needle time split, because they had more streams of income coming in through digital downloads, for example.

Ms Van Schalkwyk said that compliance issues and the referral of cases became a problem when the investigations and conviction rates were not known. She asked for quarterly reports to show the processes and to keep up to date with how the industry was complying.

Mr Mkongi asked about copyrights on international academic writing, and how the Department anticipated dealing with this going forward. He was interested in the issue of patents in relation to medicine prices in South Africa.

Mr Netshitenzhe said copyrights on international writing were dealt with by international treaties that provided for flexibility to allow the interpretation of the treaties in terms of national law. There was a provision for fair dealing in South Africa, but there was not enough precedent on the provision by the courts. The flexibility must not negatively affect the industry, however. The treaties had provisions for compulsory licensing and parallel importation that should be included in the legislation.

He asked to be allowed to provide further responses on the issue of patents in writing. The judges and prosecutors were educated, but were not necessarily competent in the area of patent law. The prosecution levels were frustrating the process of implementation, and this was still being looked into.

The Chairperson said that the Committee would be expecting the summary of the written submissions and the letter relating to the NEDLAC process that had not been followed.

The meeting was adjourned.

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