Copyright Amendment Bill sub-committee: Department report-back on priorities & way forward

Meeting report

The Subcommittee Chairperson noted that the previous week the Subcommittee had not reached consensus on its way forward on the proposed amendments by the Department. Thus it would need to determine the way forward based on consideration of the DTI’s input on the work done so far. The Chairperson requested the DTI Deputy Director-General to provide the DTI’s input.

Department comment on Copyright Amendment Bill priorities and challenges
Dr Evelyn Masotja, DTI Deputy Director-General: Consumer and Corporate Regulation, stated that after its attendance last week the Department was requested to indicate the areas that should be prioritised in the Bill as well as outlining the challenges. With regards to the challenges, the Department has prepared a response that will be presented to the Committee.

The Department had looked at the Bill and tried to create clarity on how the Bill can be approached and respond to concerns raised previously by the Committee about collecting societies. DTI was also working on treaties to ensure that they were ratified. She emphasized to Members the urgency of the Bill, because many people were not being incentivised for their creativity. People have been abused in the industry and the legislation aimed to ensure that those people were protected. The promulgation of the Bill will also benefit the industry in the international environment in providing protection and opportunities.

When the process of the Bill started it was very wide – the Copyright Review Commission (CRC) Report which focused on the music industry is now utilised as a benchmark by DTI in understanding the challenges within the music industry and how they can be best resolved. However, DTI moved beyond the music industry and started looking into other areas. It took into account the provisions from international treaties.

Emanating from the process in Parliament, a number of issues within the music industry were raised such as royalties, collecting societies and the pure exploitation of musicians. The Farlam CRC Report also raised these and, in addition, the importance of musicians understanding their rights as well as collecting societies that are abusing their position. Most of the Farlam recommendations have been included in the Bill. Currently the Bill is in favour of “fair use” as opposed to “fair dealings”. This needed further deliberation due to contestation by stakeholders.

The Chairperson asked which of the two must be dealt with by the Committee: “fair dealing” versus “fair use.”

Dr Masotja responded that the Amendment Bill currently talks to “fair use”, DTI is trying to ensure that artists have more rights because the current legislation caters only for “fair dealing” which is basically what the Amendment Bill seeks to change. We are trying to align to global trends to ensure that musicians receive their due benefits and royalties.

Fair dealing is already effective, but this is restricted and it provides for only certain activities with very little that musicians can benefit from. There are limits to the use of “fair dealing”. "Fair use" is much wider and allows musicians to make use of copyright material without permission under some circumstances. It is very important to explain the two doctrines because this is the pillar of the Bill in terms of what will be allowed and not allowed.

She proposed that, in light of the Farlam recommendations, the Bill strengthen the copyright tribunal. Secondly, the Bill must be amended as in the current Bill there is an IP tribunal but we want a copyright tribunal. However, some of the proposed provisions will still need to be approved.

The Chairperson said that the Subcommittee needed to make a recommendation to the main Committee about this, thus Members needed to decide on the way forward.

Dr Masotja said the Bill is going to focus on the copyright tribunal, and ensure that it is strengthened and capacitated.

Royalties have been problematic and DTI proposed a 50/50 split for needle time. As for sound recordings – there must be an agreement between the holder and the recording company, and failure to agree to terms and conditions means the 50/50 split will come into effect by default.

Discussion
Mr G Cachalia (DA) asked on what basis were they going to come up with the 50/50 split, because he was uncomfortable with it.

Mr C Mbuyane (ANC) said the Subcommittee needed to deal with the items that need to be amended in the Bill.

Dr Masotja replied that it was proposed on the basis that musicians are being abused and do not get their royalties.

Mr Cachalia said the determination of the split should be a decision of the wider body rather than the Committee.

Dr Masotja said the regulations will be strengthened to address governance in collecting societies and cover areas that have not yet been covered. DTI would also like to cover the log sheets in terms of the distribution of royalties as this is where the loopholes have been – this will be strengthened as well as reporting.

On the assignment of rights, many artists signed their rights over to their recording companies but DTI is proposing that after 25 years artists should be able to recoup those rights. Currently in the Bill there is a provision for the assignment automatically reverting back to the musicians after 25 years, and DTI suggests it should remain as it is.

Dr Masotja said DTI proposed that there must be one collecting society per right; this has also been raised numerous times. It is already in the Bill, the focus is now on ensuring that it is tightened up and provide for the ones that have not been catered for.

The Chairperson said the Committee would consult on some of these recommendations.

Mr Mbuyane proposed that the Committee dealt with priorities that needed to be amended because it seemed that the Committee was dealing with too many matters at the same time.

The Chairperson said that the purpose was to ensure that the Committee and the DTI were on par in understanding the priorities that needed to be dealt with. Public submissions had been made to the Committee on the amendments and this process is to ensure that there is consensus on what DTI is proposing. So Members needed to decide what should or should not be included in the Bill. The Committee will not take any decisions at the moment.

Dr Masotja said some of the priorities presented were already in the Bill. There were other items that still need to be strengthened, and formed part of the discussion such as:
• The period the royalty was retained for non-payments – DTI proposed that it can range between three to five years but the proposal is five years;
• Royalty rate – one of the contentious issues was that it was too low and there must be an ability to prescribe it. DTI was proposing that it should be agreed on between the parties but if there was a problem between parties, the Tribunal could come in. However, it was also raised that the Minister should be given the powers to prescribe the royalty rate should parties fail to reach an agreement;
• Administrations fees for collecting societies are very high; thus, they need to be reduced;
• Contracting – the template of the contract must be prescribed as recommended by the Farlam Commission. Musicians' rights were affected by the arrangement of the contracts.

There are only two collecting societies that are currently regulated by CIPC, the rest are unregulated. It was proposed that provisions for the regulation of collecting societies should be tightened up. In addition, the international treaties are currently being ratified. DTI was also looking at the contract template and it has engaged stakeholders on the provisions that should be in the contract.

Ms Meshendri Padayachy, DTI Deputy Director: Policy and Intellectual Property Laws, indicated that an implementation plan has been drafted on how the royalties will be distributed, and that plan will furnished to the Committee for further engagement. DTI has also created two presentations on how the situation would look after the Bill has been finalised for both “fair use” and “fair dealing.”

The background work that has been done was research-based and the Department has prepared a programme on how the work would progress. The programme would be furnished to the Members to ensure that DTI and the Subcommittee were on par.

Mr Mbuyane said that he had suggested that Members should be empowered on these matters as Members were not well informed about them. He proposed that the Committee comes up with a programme of action because Members need to be capacitated on the technical side of the Bill. He asked about the two collecting societies that were complying with the CIPC, as well as more details on those collecting societies.

Adv Charmaine Van Der Merwe, Senior Parliamentary Legal Advisor, said that this was the first time where legislation was considered and the amendments were so many. Ideally when this happens, the right direction would be to reject the Bill or the Minister withdraw it. The 31 May 2018 deadline would not be met. Listening to the Members and the stakeholders it seems that the process would not make the deadline. From the documents submitted by DTI there was a clear indication on which clauses must be removed or retained.

She proposed that the Committee first look at policy issues and then go through the Bill clause by clause. When DTI explains why the clause should remain or be not, it must explain why. There were a few provisions that she did not quite understand. She was concerned about the Tribunal provision because the Constitution required the Committee to facilitate public involvement but it is not possible for the Committee always to go back to the public for every clause that was amended or suggested. Otherwise, the Committee was on the right track. She proposed that the cleanest way out of a messy situation was going through the Bill clause by clause.

The Chairperson said Members needed to come up with decisions.

Mr Cachalia said he was happy with the recommendations made by Adv Van Der Merwe.

Members agreed to the proposal to go through the Bill clause by clause and the Subcommittee would make this recommendation to the Portfolio Committee.

Mr Cachalia said that the Committee needs to flag that it may not be able to meet its deadline.

The meeting was adjourned.