Copyright Amendment Bill technical amendments; Trade and Industry BRRR

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Trade and Industry

18 October 2017
Chairperson: Ms J Fubbs (ANC)
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Meeting Summary

Documents handed out:
Copyright Amendment Bill (A list)

A key item in the Budget Review and Recommendations Report was localisation and the Committee recommended that localisation should become an audit outcome in the Annual Reports to Parliament. The investments in infrastructure projects were welcomed but the Committee wanted to ensure that locally manufactured products were utilised in those projects. The Committee welcomed the commitments of Department of Trade and Industry to strengthen its capacity to monitor compliance with local content requirements.  An important point in the recommendation was that there had to be oversight, not just of plans, but of the implementation of the localisation plans.

The adoption of the Portfolio Committee of Trade and Industry Budget Review and Recommendations Report was supported by the ANC and IFP while the Democratic Alliance and the FF+ abstained.

The Committee was presented with the technically revised Copyright Amendment Bill. It had been cleaned of technical errors and had inserted technical inputs from the public by the parliamentary legal advisor and the advisory team from the Department of Trade and Industry (DTI), experts and the State Law Advisor. The most important change had been the replacement of “user” with “copyright holder” throughout the Bill, except where the Bill referred to a user paying royalties. The word “user” had been inserted in error by the drafters of the Bill. The policy matters had not been corrected, amended or changed as that was the work of the Committee. The Committee determined that it would work through the policy matters first and thereafter go through the Bill clause by clause.

The DTI Director General informed the Chairperson that DTI had clarified its position after the public submissions and they had withdrawn contentious issues such as orphan works and “funded by government”. He suggested that the focus of the Bill be to strengthen the position of South Africa’s artists and musicians as per the Farlam Copyright Review Commission Report. The other matters were too contentious.

A decision about the South African Farmers Development Association about concerns about the sugar industry would be made at the next meeting.

As the Committee had resolved to hold an inquiry on localisation, committee members were asked to submit the names of people who should be on the panel, including senior legal counsel from outside Parliament, and to consider the terms of reference which would have to be approved at its next meeting if the inquiry were to go ahead in mid November as planned.
 

Meeting report

Opening remarks
The Chairperson welcomed Mr J Mahlangu (ANC), Chief Whip of the Portfolio Committee for Arts and Culture, who had agreed to attend the meeting to ensure a quorum and assist with decisions taken.

Trade and Industry Budget Review and Recommendations Report
The Committee went through the Budget Review and Recommendations Report (BRRR). The Chairperson asked if anyone had matters to add to the Conclusions.

Mr A Williams (ANC) suggested that localisation should become an audit outcome. 
Mr D Macpherson (DA) stated that he had proposed the same matter in the previous BRRR and that the Auditor General had agreed but had not done it.
The Chairperson stated that it should be included in the Conclusion with a stronger recommendation and to note that it had been recommended the previous year. 
Ms Nontombi  Matomela, DTI Acting Chief Operating Officer, confirmed that the DTI had written to the Auditor General on the recommendation about localisation.

Adv A Alberts (FF+) suggested that localisation should be described as a policy instrument, and not be referred to as tools or measures.

The Chairperson referred to the Conclusions. Localisation had to be mentioned. She read out the following points: The Committee welcomed the commitments of DTI to strengthen its capacity to monitor compliance with local content requirements.  The investments in infrastructure projects were welcomed but the Committee wanted to ensure that locally manufactured products were utilised in those projects. It was important that the Committee engage with the Presidential Infrastructure Coordinating Committee. The engagement of black-owned companies was welcomed as part of the government’s policy on Black Industrialists in the economy.

The Committee agreed with these points on localisation.

The Chairperson the following points in Conclusions:
- The Committee noted that National Consumer Council had to be dealt with fairly harshly as it had to address its audit findings of the Auditor-General. The problem of GAAP and GRAP was noted.
- The Committee noted the improvements in the National Regulator Compulsory Specifications but it had to develop and implement action plans.
- The Committee accepted all the points in the Conclusions.

The Chairperson read the Introduction to the Committee which she would complete that morning. She referred to the increasing focus on investments to grow the economy and to create employment. A fair regulatory framework was being developed by DTI to target interventions. The Committee congratulated the performance at DTI in obtaining a clean audit.

At that point, the Chairperson received notification that the House Chairperson had not approved the proposed meeting on 19 October. She said that the Committee would have to apply for an emergency meeting to adopt the BRRR on the evening of the 18th.

 Ms L Theko (ANC) asked why the Committee did not adopt the Report at this meeting.
The Chairperson explained that party caucuses had to have the opportunity to consider the report.
Mr Alberts said that he was ready to adopt the Report. 
Mr Williams indicated that the ANC had agreed to adopt the Report despite the lack of a completed report as the Introduction was not the key part of the report. 
Mr Macpherson said that the DA would abstain from voting until its caucus had approved it.
The Chairperson said she would send the introduction to each Member as soon as she had completed it.

The Chairperson referred the Committee to the Recommendations of the BRRR. She noted that the DTI Director General, Mr October, informed the Committee that “local content” was a term frowned upon by the World Trade Organisation so the process term of “localisation” was used but meant the same as “local content”.
Mr Williams suggested the term “designated” content.
DTI Director General, Mr Lionel October, stated that “compliance with local designations” would be the appropriate term. 
Ms P Mantashe (ANC) suggested that the Committee include the need for penalties for non-compliance by government departments. 
The Chairperson informed Mr Macpherson that, upon checking, the Committee Secretary had found that the recommendation of localisation had not been included in the 2016 Recommendations. 
Mr Williams recommended that the Minister be required to ensure sanctions followed if localisation policies were not implemented.  The important point in the recommendation was that there had to be oversight of the implementation of the localisation plans.

The Committee adopted the Trade and Industry BRRR supported by the ANC and IFP while the FF+ and the Democratic Alliance abstained. There were no objections.

The Chairperson thanked DTI Director General, Mr October, for his attendance during the BRRR.

The Chairperson welcomed Adv Johan Strydom, DTI Legal Advisor, recently seconded to work on the Copyright Amendment Bill

Copyright Amendment Bill: revised version
Adv Charmaine van der Merwe, Parliamentary Legal Advisor, explained that she had been required to clean up the Bill. A team was formed with DTI representatives and herself and the State Law Advisor had kept abreast of matters. Prof Schonwetter and Prof Ncube from the University of Cape Town (UCT) had attended the meetings as experts provided by the Committee.  A large number of amendments had been made but Adv van der Merwe assured the Committee that absolutely no policy changes had been made. Anything that referred to policy had been flagged.  There were two documents: one with the deletions and insertions, and a second with the insertions only as the amendments had been deleted.  The team had produced an A-list with Amendments and a B-Bill. The main reason for an A-list was to keep track of amendments. She suggested that the amendments in the A-list document could be tracked by using coloured fonts. The Committee could opt for a re-draft if the Bill had so many changes that it was messy.  If the Committee wanted to change the document to become a re-draft, it could be done.  The Committee should decide which document would be easier to work with. She reiterated that policy had not been changed and that only technical changes had been made and the document had been made more readable.

Discussion
Mr J Esterhuizen (IFP) said that there were some things about the Bill that had created the perception that users were themselves the rights holders. That could not be. There had been very emotional submissions to the Committee about the rights of artists and authors and their rights had to be protected as well as their income. He did not want people to lose copyright as a result of technology.

Adv Alberts asked for an electronic copy of the Bill and asked Adv van der Merwe whether the document was the DTI Bill which did not contain the recommendations made in the hearings.  He wanted to see that submission recommendations were linked in the Bill.  Changes needed to be connected to the people who had made the inputs. Public comment could not be window dressing only and had to be reflected in some way in the Bill.  That would show how policy had been formulated.
The Chairperson explained that the Content Advisor was creating a matrix which showed who had made input and whether it had been accepted. The matrix would be shared with the Committee in the following week.

Mr Macpherson stated that the first time that the Committee had worked on the Bill, it had been frustrating because of the way in which the Bill had been drafted and the divergence between the policy position and what was in the Bill, and then the DTI presentations. They had seemed to be polar opposites. He asked if the B-Bill was closer to policy or to the DTI position, as the two experts were probably aligned to the DTI position. He asked Adv van der Merwe how she had managed the two positions, especially as the DTI and its experts had a particular position.  It was absolutely critical that the Committee understood whether the DTI inputs and those made at the hearings had been incorporated into the Bill. Was the Committee going to be provided with a tracking of inputs?

Adv van der Merwe informed Mr Esterhuizen that everywhere that the word “user” had been used, it had been changed to read “copyright holder”. The word “user” was only retained where the user had to pay royalties. The general use of the word “user” had been an error.  Adv Alberts could be given an electronic copy by the secretary. The deletions document would be retained as a record of what had been deleted and they were working on the cleaned-up version.
She told Mr Macpherson that all the technical drafting concerns had been considered but, as there were over 70 submissions, she had not listed all, especially as many submissions had indicated the same concern.  She was happy to add a column to the matrix being developed showing whether issues had been included or not.  The B-Bill read as per the DTI presentation on the Bill itself. DTI changes had not been concluded as the Committee had to decide whether it agreed with the policy proposals by DTI.  Policy issues had been flagged. The Bill was not ready to be adopted.  She just wanted to know which document she had to present to the Committee. Once she completed cleaning up the Bill, the Committee would receive the Bill and would have to consider policy and public inputs. She and the team had only addressed inputs from the public that dealt with technical matters in the Bill.

Mr Macpherson asked if the technical and legal definition recommendations had been accepted and the definitions re-worded.

Mr Esterhuizen noted that some things had been taken out, particularly orphan work.  He was also concerned about funded work, for example, universities owning textbooks written by funded writers.

Adv van der Merwe assured Mr Macpherson that definitions had been corrected or retained in line with relevant treaties. The Committee was still able to make changes to definitions if it wished. Mr Esterhuizen’s concerns had been flagged as policy issues, such as orphan work. DTI had looked at the “funded by” matter and flagged it as a policy matter.

DTI Director General, Mr October, informed the Chairperson that DTI had clarified its position after the public submissions and they had withdrawn contentious issues such as orphan works and “funded by” so there were no more policy debates and he suggested that the focus of the Bill be to strengthen the position of artists and musicians as per the Farlam Copyright Review Commission Report. The other issues were too contentious. The Committee should focus on the Bill and the Farlam Report and do something for South Africa’s artists and musicians.

Mr Esterhuizen stated that he found it unacceptable that people lost copyright because where the state, for example, had funded the writing of a textbook, it retained copyright. (Clause 3)

Adv van der Merwe explained that the point was that the state had made funds available for the writing of textbooks and retained copyright. However, DTI had indicated that it did not want to pursue the matter of “funded by” and it should be removed.  However, it had been left in the Bill as it was a policy matter which had not been touched by her and the team.

The Chairperson noted that as the wording stood, without the earlier DTI input, an author of a textbook would receive copyright on the textbook, so the Bill was acceptable as it stood. The orphan works required explanation by the Advocate.

Adv van der Merwe explained that orphan work related to when the copyright owner could not be traced.  No one could use the work without a difficult process. For example, if someone wanted to use some music but could not find the copyright owner, that person could apply to the Commission and pay royalties into a holding account. The process was convoluted. If the DTI took it out, orphan works would fall under the fair use exception and four principles would apply. Further discussion of fair use and fair dealing was necessary before the orphan works clauses were removed, otherwise people could still not use orphan works. She suggested that the Committee deal with the issue of fair dealing before looking at orphan works because the decision on orphan works might well depend on the definition of fair use.

The Chairperson agreed with this suggestion.  She asked Adv van der Merwe to make a presentation about the implications of the different types of the Bill.  When the Committee sat again, they would be working from three documents so she asked Adv van der Merwe to explain how it would work.

Adv van der Merwe replied that the Committee could either start with Clause 2 and work through the document. A second way was to deal with each policy issue as some policy issues affected a number of clauses, although it would mean jumping about in the Bill. Thereafter they could work through the Bill clause by clause.  She suggested that the Committee work on the cleaner Bill, or the end result, as there would be many changes to policy that would cause the Bill to look very messy. 

The Chairperson asked the parties for comment.

Mr Williams stated that the Committee should go with policy issues first as the policy issues may change clauses.
Mr Macpherson suggested that the fundamental policy issues be dealt with first and thereafter the Bill could be addressed clause by clause.
Adv Alberts and Mr Esterhuizen agreed that the Committee had to look at fundamental policy issues first.   

The Chairperson said that the Committee had to keep on track as a great deal of work had to be done. The Committee had to work robustly on the Bill as it was a serious piece of legislation.  She noted that those who had given input at the hearings should know where the Committee was with the Bill as some of the interested members of the public were still working on the original Bill. They needed to be kept in the loop. 

South African Farmers Development Association (SAFDA)
The Chairperson had met the South African Farmers Development Association which had come to the Committee on 12 October to present their case. The law applying to the sugar industry had been written in 1978 and had had a slight amendment in 1992.  The DTI Director General had brokered an agreement between the South African Farmers Development Association and the South African Cane Growers Association but it appeared that one group had reneged on the agreement. The Committee proposed that the Minister apply his mind to the letter of 20 April 2017 and that he give power to the recommendations in the letter.  The situation had been deadlocked for too long. The Committee could not take a decision immediately as only the Chairperson and Mr Cachalia had been present at the meeting with the Farmers Development Association. The Chairperson would make the relevant documents available to the Members and the Committee decision would be made at the following meeting when all Members could make suitable input.

Debt Relief Bill
The Chairperson thanked the Committee which had worked well as a team when dealing with SARS.

Localisation
The Chairperson said that the Committee had determined to undertake an inquiry into the matter of localisation. Members had been asked to submit the names of people who could be on the panel. The Committee required a very strong experienced senior legal counsel from outside Parliament.  It would take three weeks to process preparations for the inquiry and the intention had been to invite the relevant entities in mid November.  It had therefore become an urgent matter and so the Committee had to provide the names by 24 October. The terms of reference could not be approved at the  current meeting.  Members had to study the proposed terms of reference. The Committee would invite people to show contracts, and only when they refused categorically, would the Committee summons them. It was also possible to have closed sessions for those that wanted to testify, but not in public.

Committee Business
The next meeting would be on Tuesday 24 October 2017. On the schedule was the Debt Relief Bill for consideration, a National Treasury presentation on its study, if available, and Localisation terms of reference and the SAFDA sugar farmers decision. The Copyright Bill would also be considered.

Ms Theko informed the Chairperson that some Members were working on Fridays and would not be able to meet the following Thursday evening. 
The Chairperson indicated that there was no other possible day and the Committee had lost three Fridays as Members had attended other meetings.  The Committee had run out of time.  She stated that they would not work very late but the Chairperson of Chairs required a week’s notice prior to an evening meeting so she would put in the application, and cancel if necessary.

The Chairperson mentioned that the Committee had been invited to the South African Bureau of Standards Awards Ceremony in Sandton. The invitation would be distributed.

Meeting was adjourned.

 

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