Copyright Amendment Bill: Department of Arts and Culture submission

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Trade and Industry

18 May 2018
Chairperson: Ms L Theko (ANC) (Subcommittee)
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Meeting Summary

The Subcommittee Chairperson clarified that there was apparent confusion by the public that the Committee had taken a position on the Copyright Amendment Bill. The public was informed that the Committee has not yet taken any position on the Copyright Amendment Bill. The Committee is currently receiving proposals and recommendations from the Departments of Trade and Industry and Arts and Culture. It is only after the Committee has applied itself, will it take its own stance on the policy proposals and recommendations from both departments.

The Department of Arts and Culture outlined its position on clauses in the Bill:
• In Clause 3, DAC supports the protection of state owned IP, but the clause is ambiguous. Thus, it supported the DTI proposal that “funded by” should be removed.

• In Clause 5 (insertion of Section 6A), DAC proposed that the clause should be removed. The alternative is to address unfair contracts through the introduction of standard contracts across the value chain.

• In Clause 7, DAC supports the clause but it should be specific in the definition of the rights holder – visual arts. Secondly, the liability for the payment of royalties should be well stipulated. It should be clear who will be legally required to collect the royalties and to disclose any related information.

• In Clause 8, it is not clear how royalties derived from usage of audio-visual material could be split on a 50/50 basis. Instead of the 50/50 split, perhaps the Bill should consider provision of equitable remuneration.

• In Clause 13, DAC indicated that adopting the fair use model would be an undercut for content creators and it will serve only the interest of big corporations especially wireless services providers. DAC noted with concern the inclusion of “personal use”. It believed that technology has diversified reproduction, distribution and consumption of content making it difficult to deal with unauthorized exploitation and all is in the name of “private use”. It appealed for a law that will adequately respond to this reality. Therefore, DAC recommended the introduction of a private copying levy in the Bill.

• In Clause 20, DAC indicated that although libraries, archives, museums and galleries exist to make their collections available to people, they differ in both the types of materials they hold, and the way materials are accessed. So while the provision of general exceptions might be applicable and favourable for libraries, it might not be the case for archives. Thus, problems arise if the Bill treats these institutions the same and puts them in one basket of exceptions without revisiting the Acts that govern them. It is for this reason DAC would not support the provision and it is therefore recommended that there be further discussion on this clause.

• Clause 22 was not supported by DAC and it proposed that the clause be adjusted to be similar to Canadian law. The standard practice in most countries is that the creator owns the right in a commissioned work, and the person who commissioned the work will only have a licence to use the work for the purpose for which it was commissioned. If the person who commissioned the work re-uses it for other purposes, they must obtain permission from the creator to use the work in a new way.

• Clause 25 was supported in the accreditation and registration of all collecting societies and the legal requirements for management of the institutions and the royalties. The provision is in line with MITT and CRC recommendations. However, DAC is questioning the notion of one collecting society per set of rights – it is good at face value especially for effective management and distribution of copyright. However, with structural monopoly currently at play, the creation of statutory monopoly could result in a situation where strong collecting societies overshadow the weaker societies. If not carefully done, this may defeat efforts of transformation.

The Subcommittee Chairperson requested the DTI and DAC should put forward a consolidated report on each of their proposals clause by clause for the Committee to consider.

Meeting report

The Chairperson welcomed Department of Arts and Culture who would make its briefing and thereafter the legal advisor would advise. The DAC would put together a report with the Department of Trade and Industry so the Subcommittee is aware of the positions of both departments on the Copyright Amendment Bill.

She stated that the Committee has received numerous letters from members of the public and various stakeholders asking about its decision and position on the Copyright Amendment Bill. She told members of the public that the Committee has not yet taken any decision on the policies or proposals of the Department of Trade and Industry. She emphasized that it was important that the public and stakeholders were aware of this. The Subcommittee will receive the report of the departments and report to the Portfolio Committee.

Department of Arts and Culture position on the Copyright Amendment Bill
Mr Zwelakhe Mbiba, Acting Deputy Director-General: DAC, focused on the clauses that have a bearing on the work of the Department of Arts and Culture to flag concerns, taking into account the points that were raised by various stakeholders and to respond to the DTI proposal for two phases in implementing the Bill.

There were larger developmental issues envisaged from the outcome of the process but following concerns raised during the public hearings, a drafting team comprising of Parliamentary Legal Services, DTI and consultants was established to address technical issues such as incorrect terminology that was contradictory to copyright law. The DTI has recently presented the corrected version, with a proposal that it should be implemented in two phases, firstly addressing issues that are amicable to the various stakeholders, then later deal with contested matters.

The Department has the dilemma of competing rights, in dealing with its mandate. It is faced with realities of having to manage competing interests from key stakeholders. On the one hand, there are the creators of content such as artists, publishers, record companies. whose rights need to be protected. On the other hand, there are DAC institutions which are providing services for social development, such as education institutions, museums, libraries, archives and institutions representing people with disability, and these stakeholders need access to materials without impeding on the rights of the creators. The challenge is reaching a balance between the rights of creators and the public interest.

• In Clause 3, the DAC supports the protection of state owned IP, but the clause is ambiguous. The words “funded by” should be removed to avoid the risk of impacting the many creative works funded by government, especially in cases when government merely provides incentives and support measures, with no intention to own the creative work.

• In Clause 5 the understanding is that this clause intends to protect authors of literary and musical work to receive royalties when the work is transferred to music publishers through contractual arrangements, in order to prevent unfair assignments. DAC proposes that the clause be removed. The alternative is to address unfair contracts through the introduction of standard contracts across the value chain.

• In Clause 7, with the insertion of section 7A, B, C, D and E, DAC supports the proposed amendments to introduce resale right, something that has been missing in legislation. DAC proposes that the clause should be specific in terms of its definition of the right holder – visual artists. DAC further recommends that a consideration be given to the Senegalese model where the rates are set upfront by the statute. Secondly the liability for payment of the royalties should be well stipulated – whether it is by the seller or the buyer. It should be clear who will be legally required to collect the royalties and to disclose any related information.

Though it is common in visual arts for individuals to sell and manage their creative work through individual contracts, the challenge is many artists might not be in a position to manage and track their work given the time and financial cost involved, thus running the risk of not getting benefits. Collective management of rights is a very significant and effective way of managing the rights but the Bill does not provide for this.

7B 3)(a)(i) requires that resale royalties be given to SA citizen or those residing in SA – this may undermine the principle of reciprocity, and the inclusion of 7B(3)(c), and the manner in which it is phrased does not imply any provision of reciprocity.

• In Clause 8, the main groups of right holders in audio-visual production are authors, performers, and producers. It is not clear how royalties derived from the usage of the audio-visual material could be split on a 50/50 basis. The Beijing Treaty says in Article 12(C) that a performer shall have the right to receive royalties or equitable remuneration for any use of the performance. However, the Bill focuses on only two right holders, thus excludes the third right holder. Instead of the 50/50 split, perhaps the Bill should consider provision of equitable remuneration.

• Clause 11 will assist with collection of royalties; and it will strengthen, and enforce compliance, seeking to address the concerns that were raised by both the Music Industry Task Team (MITT) and Copyright Review Commission (CRC) – on payment of royalties by users. However, the question of who constitutes a “user” is something that still needs to addressed, as the legislation is still not clear, and this results in depriving many content creators of their potential income. DAC noted the inclusion of Indigenous Community or National Trust, a matter for discussion until the Indigenous Knowledge Systems (IKS) legislation is finalised.

• In Clause 13, fair use by its nature is open-ended and it creates uncertainties in the management of rights. If adopted, this model will permit uncontrollable and unreasonable access to copyright materials resulting in reduction of real income for copyright owners. Actually, only less than 10 of the 176 members of the Berne Convention adopted the fair use model. Policy makers have labelled the Fair Use model as the Right to Hire a Lawyer. Adopting the fair use model into our legislation would be an undercut for content creators and it will only serve the interest of big corporations especially wireless service providers.

DAC noted with concern the inclusion “personal use”. It believes that technology has diversified reproduction, distribution and consumption of content making it difficult to deal with unauthorized exploitation and all this is in the name of “private use”. We therefore appeal for a law that will adequately respond to this reality. It is for this reason that DAC recommends the introduction of a private copying levy in the Bill.  

• In Clause 20, although libraries, archives, museums and galleries exist to make their collections available to people, they differ in both the types of materials they hold, and the way materials are accessed. Just to give two examples: Libraries acquire, preserve and make materials accessible to meet the information needs of the people - mainly for personal and socio-economic development. On the other hand, archives are distinguished from libraries in terms of their primary responsibility which is to preserve the nation’s history, heritage and memory and provide access to researchers – both national and foreign persons for private, academic and commercial purposes.

While the provision of this General Exceptions might be applicable and favourable for libraries, it might not be the case with the archives. Problems arise if the Bill treats these institutions the same and put them in one basket of exceptions without revisiting the Acts that govern them. It is for this reason DAC would not support the provision and it is therefore recommended that there be further discussion on this clause.

• Clause 22 was not supported by DAC and it proposed that the clause be adjusted to be similar to Canadian law. The standard practice in most countries is that the creator owns the right in a commissioned work, and the person who commissioned the work will only have a licence to use the work for the purpose for which it was commissioned. If the person who commissioned the work re-uses it for other purposes, they must obtain permission from the creator to use the work in a new way.

• In Clause 24, DAC is of the view that creation of orphan works should be avoided as far as possible, and only under reasonable situations should the unclaimed orphan royalties be directed towards supporting the development of the arts, rather than keeping the money in a trust account.

• Clause 25 DAC supports the provision for accreditation and registration of all collecting societies and the legal requirements for management of the institutions and the royalties. The functioning of collecting societies has raised concerns as to their transparency, governance and the handling of revenues collected on behalf of right-holders. It is necessary that collective management organizations (CMOs) provide a more efficient service to right holders and users. This provision will strengthen their good governance. The provision is in line with the MITT and the CRC recommendations. However, DAC noted that “authors” as key stakeholders have not been covered by the sections. It is proposed that the sections be reworked to include the word “author”.

However, DAC is questioning the notion of one collecting society per set of rights – it is good at face value especially for effective management and distribution of copyright. However, with structural monopoly currently at play, the creation of statutory monopoly could result in a situation where strong collecting societies overshadow the weaker societies. If not carefully done, this may defeat efforts of transformation.

• Clause 31 – 34, DAC supports the establishment of the Tribunal to assist in the management and enforcement of legislation and to create a more accessible means of dealing with disputes. However, each party participating in a hearing of the Tribunal is to bear its own costs. This might not assist indigent right holders/practitioners – hence there will be a need for some kind of assistance, and perhaps legal aid could be a necessity.

With respect to local content, perhaps what needs to be done is to review the definition of local content to include ownership of the content in the definition; hence in some cases what seems to be local content might not be local in a true sense of ownership. As for the absence of contracts, it was noted during the implementation of needle time that contracts between recording artists and record companies were not designed for needle time. Names and contact details of session artists who contributed to the sound recording were not recorded and this created a challenge in the sharing and distribution of needle time income. We should think ahead on how some of the provisions will be implemented (i.e. indigenous community).

Lastly, on keeping proprietorship of copyright to 50 years after the death of creator, while international trends is to move copyright tenure to 70 years. Traditionally, physical assets have been key to the economy of a nation, but in recent years the situation has changed significantly and intangible assets are becoming more valuable than their physical assets. We may need to think of ways how South Africa protects its investment in the cultural and creative industries (CCI).

In conclusion, DAC noted the DTI proposal to implement the amendment of the Act in two phases is based on the realisation that there are serious concerns about the Bill, and taking into consideration its own concerns raised in this presentation, DAC supports the DTI proposal.

Discussion
Adv Charmaine van der Merwe, Senior Legal Advisor: Parliament, said that the Subcommittee would have to wait and hear what DTI will say in response and if there is convergence with some of the proposals made by DAC with those of the DTI. Where there is no convergence, a discussion would be required. DTI has already prepared clause by clause proposals. She suggested that the DTI pulls this DAC information into that discussion so that the Committee may know the positions of both departments on the different clauses.

Mr G Cachalia (DA) supported this suggestion.

Mr B Radebe (ANC) said the presentation was good and it highlighted pertinent issues, but they cannot be discussed now. Everything has been noted and the DTI could perhaps present a response to the information presented by DAC.

The Subcommittee Chairperson said the two departments should converge and put forward a consolidated report which should be submitted to the Committee for consideration. The report should include all information from stakeholders. When the Committee takes a decision, it would have done so after taking into consideration all the issues, proposals and information.

The meeting was adjourned.

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