Copyright Amendment Bill: response to public submissions

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Trade, Industry and Competition

21 August 2018
Chairperson: Ms J Fubbs (ANC)
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Meeting Summary

The Department of Trade and Industry, assisted by a Senior Parliamentary Legal Advisor, led the Committee through some of the challenges that had surfaced during the analysis of the wide-ranging public responses to the advertisement of new clauses for comment in the Copyright Amendment Bill.

Due to a number of Members missing the previous week meetings, the Legal Advisor provided a summary of where the Committee was in the process. When the Committee had started looking at the Copyright Amendment Bill, there had been a lot of technical concerns from the public, so meetings had been held with legal personnel to attempt to correct the concerns. Members had had discussions on whether principles applied across the board and similar concerns. In June 2018, new clauses had been advertised for the public to comment on. Those clauses dealt with artistic visual work, minimum content and retrospectivity, royalties and commissioned works, log sheets, reciprocity processes for collecting societies, finding owners and performers, penalties, and significant changes to the Copyright Tribunal and transitional arrangements to do with the Intellectual Property Laws Amendment Act. The resultant public submissions had raised a number of concerns and some clauses had been identified which might need some adjustment.

A number of questions had to be addressed. Firstly, what did the Committee pick up that was outside the scope of the advertised clauses? Secondly, what were the substantive issues causing problems? How far back would retrospectivity go and how would the lack of data and evidence of contracts be resolved? Responses to Sections 6A, 7A and 8A had varied from practical concerns to emotional outcries. Financial concerns had loomed large as well as the practicality of implementation. The Legal Advisor warned the Committee that unless the practical difficulties facing implementation could be resolved, the Bill would not meet the requirements of the rule of law. Even though the public comments had suggested that retrospectivity was not workable, the Department had decided to look at the practical challenges raised by stakeholders in an attempt to find solutions to address thse either in the Bill or outside of the Bill.

In attempting to resolve the questions of practicality, Members suggested that fundamental questions had to be answered. Exactly who were they trying to protect or compensate for past abuses? Could there not be a focus on a specific group of people who had suffered abuse in the past, as had been done in the Credit Amendment Bill?

The Chairperson expressed a concern that while the Companies and Intellectual Property Commission (CIPC) had been defined in the Intellectual Property Laws Amendment Act (IPLAA), that Act had not yet been implemented. It was determined that the legislative impasse regarding the Commission could be resolved by including a definition of the CIPC in the Transitional Provisions of the Bill, which could be recalled once the Intellectual Property Laws Amendment Act became operational. That was critical in the light of the Commission’s role in the administering both the collecting societies and the Copyright Tribunal.

The question was raised about how many times clauses would be advertised for public input, especially as members of the public did not restrict their responses to the advertised clauses. To what extent could submissions on matters outside of the advertised clauses be attended to without it becoming an unfair process for those who had restricted their input? Where did the Committee find the balance between public engagement and getting the legislation finalised?

Collecting societies were currently not performing their functions efficiently and artists were not being paid royalties timeously and fairly. The Committee discussed whether it was a question of lack of adequate legislation and regulations to control the societies and to ensure payment of royalties to their members or whether it was an inherent problem in the industry. That dilemma led to a debate about the constitutional right of association, which suggested that no limit could be imposed on the number of societies per right, and the administrative advantages, especially in terms of payment to artists, should collecting societies be limited to one per right.

Concern was expressed that the legislation catered for exceptions across the board but in terms of computers, the Committee had taken out computer programs, which was the heart of digital. There was a balance for disabilities, fair use and education, but computer programs were excluded. The technological protection measures came from the World Intellectual Property Organization (WIPO) Copyright Treaty. One could have a code to lock one’s work and that was in the exceptions in the Bill. There was a question about the penalties as no one was supposed hack and break codes, but it was done. Equally, there was a need to create access online as everyone consumed digitally. The Copyright Amendment Bill had a limited mandate in the digital world.

However, the Bill also could not neglect online downloads and sales. The Committee should not sell out the authors who would get 0.0001% for their work. If the objective was to protect authors, the problem should be defined, and a solution sought to protect them. Online contracts could be protected with the minimum requirements in a contract, but streaming and digital platforms such as Google and Facebook were only a fraction of the online challenge. The Committee had to take account of the Fourth Industrial Revolution and virtual reality. While it was not possible to legislate for the unknown future of technology, the legislation should not block future technology and there should not be entry barriers to innovation in the future. The Committee could not legislate virtual reality in the cloud, but it had to be able to regulate what was reality.

It was decided that in the following meeting, the Committee should move to a point of finalising the clauses where there was consensus, so that there would be greater clarity on what was achievable in the Bill.

Meeting report

Opening remarks
The Chairperson noted that it would be a late evening. The business of the evening was the Copyright Amendment Bill. She welcomed Adv Rory Voller, Commissioner, Companies and Intellectual Property Commission (CIPC), those DTI team members who were not present at the afternoon session such as Adv Johan Strydom, DTI Legal Advisor. Mr Gideon Hoon, Senior State Law Advisor, was in attendance because the Copyright Amendment Bill was an Executive Bill.

Opening remarks by DTI Deputy Director General
Dr Evelyn Masotja, DTI DDG: Consumer and Corporate Regulation Division, informed the Committee that the Copyright team had met to discuss the Committee’s proposals of the previous week. Some revisions had been made in the wording. The technical team had met but had found that it was a complex process as some of the inputs from the public were quite diverse. The team found that coordinating and consolidating everything into a workable proposal was very difficult and not perfect, so she appealed for consideration from the Committee.

Dr Masotja reminded the Committee that it had received more than 50 submissions from the public after advertising the additional clauses. DTI had briefed the Committee on the submissions the previous week. The resale royalties was a new concept which DTI had wanted to create for artists who had not had opportunities. The briefing had looked at the minimum criteria for a contract, retrospectivity, the application re-sale royalty rights, log sheets, penalties and royalties.

Ms C Theko (ANC) said that she and Mr Mbuyane had unavoidably not been able to attend the previous week. She asked for a recap of what had been decided the previous week.

The DDG recapped by looking at the minimum content of the contract agreements. The submissions had indicated that the framework did not work for many of the artists, such as authors and literary works. DTI was going to re-word Section 8(a) to address the concern about different requirements in a contract and different forms of payment, which meant that DTI could not treat the artistic fields as if they were all the same. The clause on retrospectivity had drawn many responses, many of them very negative, saying that it would not work, was unconstitutional and would open the Bill to legal challenges. The submissions suggested that the penalties for the log sheets and the infringements were very harsh. As a result, the team had some proposals to make on those clauses. Some issues had not been discussed at length the previous week because, Ms Theko, Copyright Sub-Committee Chairperson, had not been present.

DTI briefing on practical challenges and concerns: retrospective application of Section 6A, 7A, 8A
Dr Masotja referred to retrospectivity in Sections 6A, 7A and 8A. Even though the public comments had suggested that retrospectivity was not workable, the team had decided to look at the practical challenges raised by the stakeholders in an attempt to find solutions to address the concerns either in the Bill or outside of the Bill. DTI had some concerns which would be shared later.

Dr Masotja referred to the concern that organisations had no budget for new negotiations and there would be financial constraints when they had to go back to negotiations on royalties. The comment came from the Publishers Association of South Africa (PASA). DTI explained that the percentage payable was only for future earnings. It might have been projected revenue in the future so there might be losses for past payments. Further, when the price had been negotiated, the negotiations had not taken into account perpetual royalties. Authors had been paid a larger sum than would have been the case if royalties were also part of the deal. DTI suggested that those concerns could be raised with the author, and if the author did not acknowledge that he/she had received a larger sum at the outset than would have been the case if the royalties had been taken into account, the matter could be referred to the Copyright Tribunal.

Another concern was the difficulty in tracing people and re-negotiating terms agreed to many years ago under very different circumstances. There could be practical problems in either tracing the author or the copyright owner. DTI suggested that if authors could not be found, those would become orphan works. A proposal was made in which a set period could be determined during which the author would register with the Minister. The period could be five years. Thereafter, there could be no claims of the copyright owner. One suggestion was for retrospectivity to go back only as far as the date of implementation of the Copyright Act in 1978. Those solutions would have to advertised for comment by the public.

Other concerns raised that the retrospectivity clause would run into difficulties where numerous contracts had been negotiated since the first contract between the artist and the purchaser of copyright. There might have been multiple agreements in the past and all parties involved would have to be taken into account. It would complicate transactions. DTI suggested that those issues could be resolved via the Copyright Tribunal. Public submissions suggested that the clause had the potential to wreak havoc on business arrangements and business relationships.

Non-profit organisations (NPOs) would not be in a position to pay royalties so the Bill would have to exclude NPOs from the clause. That would also have to be advertised for comment by the public. There was a fear that disputes from those causes could inundate the Copyright Tribunal, making it impossible to function efficiently. Where there had been multiple authors and so multiple agreements, it would be even more complicated, and the royalty would have to be shared amongst all those involved. It was another matter that the Tribunal might have to resolve. In fact, so many matters could be referred to the Tribunal that it could become completely non-functional.

There were still many questions. If the arrangement was not re-negotiated within 48 years, did it expire?
Could children re-negotiate contracts? Would products damaged or destroyed be excluded from the Bill? What if the work was in the public domain, had a creative commons licence, or had been donated? It would have adverse implications on existing agreements. The market for creative works could be disruptive or damaged. People would have to incur debts and sell assets to be able to pay royalties. What if the work had been donated or was utilised under creative commons licence? What if businesses had to close down?
People bought work at a fixed price and did not take into account ongoing royalties.

The Chairperson stated that the DDG had asked for comment on the difficulties related to the retrospective clauses. She alerted Ms Theko to that fact that, as she had not been in the meetings the previous week, the DTI was specifically requiring her input on the matter.

Mr G Cachalia (DA) had an issue with the DTI document. It was a laundry list of issues and he would have hoped for categorisation: constitutionality, general law, impact / consequences and proposed solutions. The list was not helpful, and he recommended that the Committee not use the document.
Mr A Alberts (FF+) noted that some solutions had been provided, but there were quite a few concerns where no solution had been suggested. Some solutions suggested a referral to the Copyright Tribunal, but the Tribunal was likely to pack up and run away when they saw some of the issues because the complexities could only be modelled on a computer. He was not sure of the solution, but he suggested that the Committee should seriously look at the "backward-looking" aspect of the clause. He suggested that it be capped at a certain number of years. Even 1978 would result in too many complications. Who were the Members trying to protect or compensate for abuses? Could they not focus on a group of people who had suffered abuse in the past, as they had done in the Credit Amendment Bill? That might simplify the approach. To leave it completely open would make for legislation so complex that even the Tribunal would not be able to cope.

The Chairperson asked Adv van der Merwe for her input.

Adv van der Merwe explained that the reason for the document was the concern that both the DTI and she had that the retrospective clauses would not pass constitutional muster because the Committee might end up with a law that could not be implemented and would not adhere to the rule of law. They had listed the concerns and attempted to find ways of retaining the clauses. Areas that were blank and without solutions were areas where they did not know what to propose, which meant that there was still a problem about the rule of law.

Some things could make it better, such as limiting retrospectivity to 1978 when the Copyright Act was passed, or requiring that the author should approach the copyright owner. But they could not find solutions. If solutions could not be found, the problem about the rule of law remained.

The Chairperson invited the CIPC Commissioner to make an input, but he had nothing to add at that time.

Copyright Amendment Bill: Response to public submissions (continued)
The following additional concerns raised in public submissions needed to be addressed:
- Exceptions for computer programs should be brought back.
- Private levies were requested. DTI noted that the Committee had already taken a decision on that.
- One collecting society per right. The Committee had decided to open up the number of collecting societies but there were implementation challenges. CIPC had requested one society per right.
- The Committee had not adequately deliberated on technological protection measures (TPMs).
- Collecting societies wanted perpetual licences and not the five-year licences as proposed.
- Concern that CIPC was not included in the Bill. CIPC was in the Intellectual Property Laws Amendment Act (IPLAA).

The Chairperson noted that IPLAA was an Act and CIPC had been taken care of there, but that Act had not been implemented yet.

The DDG stated that a legal advisor had suggested that CIPC could perhaps be included in definitions in the Copyright Act. But she was consulting colleagues, especially in the Department of Science and Technology.

Adv van der Merwe spoke of having a transitional provision. She explained that if legislation wanted to refer to legislation that had not yet been enacted, it was possible to create a transitional provision which would provide for this until IPLAA was implemented. The Copyright Amendment Bill already had a transitional provision which, at that stage, catered for indigenous cultural expressions and indigenous communities. She suggested that CIPC be dealt with by determining which definitions should be included in transitional provision.

The Chairperson noted that the Committee had dealt with outstanding matters, but she wanted to get a sense of where the Committee was with the Bill so that all Members were on the same page. The overview of the submissions had been very useful. She asked for a broad overview of the entire process, almost as if briefing someone who did not know anything about the Bill. She suggested that Dr Masotja, Adv van der Merwe and CIPC provide the overview.

Overview of the entire process of Copyright Amendment Bill  
Adv van der Merwe said when the Committee had started looking at the Copyright Amendment Bill, there had been a lot of technical concerns from the public, so meetings had been held with legal personnel to attempt to correct the concerns. Members had had discussions about whether principles applied across the board and so on. In June some new clauses had been advertised for public comment. Those clauses had referred to artistic visual work, minimum content and retrospectivity, royalties and commissioned works, log sheets, reciprocity processes for collecting societies, finding owners and performers, penalties, and significant changes to the Copyright Tribunal and transitional arrangements to do with the Intellectual Property Laws Amendment Act.

The public submissions had raised a number of concerns where there might need to be some adjustments to the Bill. DTI and State and Parliamentary Legal Services had worked together and put together a document of 17 pages of clauses. There were only three clauses that still needed to be finalised, a policy decision on retrospectivity was required, plus to make it an offence if a collecting society had not been accredited.

The team had looked at solutions to practical concerns plus offences to act as a deterrent to collecting societies, and what needed to be advertised for public comment, as well as to draw up a list of permissions required from the National Assembly. The Committee had a long list of permissions that had to be requested from the National Assembly and that had been handed to Committee Members. Each subsection of the Act that had not previously been part of the Amendment Bill but was now to be included had to be the subject of permission from the National Assembly. However, all permissions would be submitted in a single document.

In summary, three clauses had to be finalised; a small number of about four clauses had to be advertised for public comment; permissions had to be obtained from the House, and a policy decision had to be taken on retrospectivity.

Ms Theko asked about retrospectivity. What was the retrospective date and was it constitutional?

Adv van der Merwe explained that there was another clause about resale royalty rights of copyright which related to future sales and would happen organically. It was, therefore, not problematic. But retrospectivity applied in three clauses. The unconstitutionality did not lie in the fact that there was deprivation, as it was not arbitrary, there was a process and there was a rationale for it. The constitutionality problem lay in practical problems and if the implementation plan was not clear, the legislation would not pass the rule of law.

One of the clauses dealt with the proportion of a royalty that had to be paid to an author if the copyright holder made money from that person’s work. From the date the Copyright Amendment Act came into operation, if a seller allowed a buyer to exploit his work, he would need a contract and future royalties. Unless the Bill specifically stated that the Act applied to activities in the past, it would not be applied to past transactions. One example was the Hector Pietersen photograph that had been sold once many years back but was subsequently frequently used but the photographer did not get anything for the use thereof. It would apply to money made in the future and not to money made in the past, but it had to apply to a work that was made or assigned in the past. There were concerns and problems about locating people, the obligation on people who had works for personal use, and so on.

The first question was how far back the legislation would go. Questions such as was how long the legislation would go back, had to be answered. What if the author was deceased or the work had not been used for commercial purposes? Those issues had been listed in the document presented by Dr Masotja. Until those issues were resolved, the Bill would not pass the rule of law. A date for how far it went back had not been decided but there had to be a specific limit or date and some rationale for the date determined.

The Chairperson asked Ms Theko if she would like to engage.

Ms Theko said that she would need to meet with her party study group before she could present something. She was struggling to understand some of the issues. Once she had met the leadership, she would come back and put her position on the table.

The Chairperson agreed that it was difficult and was not something that other Committee Members had fully assimilated either.

Mr Mbuyane pointed that the last time he had dealt with the Bill was in June when the Committee advertised some clauses for public comment. Now they were going to advertise more clauses for public comment. He would go through the response document but the submission on the one collecting society per right had not been advertised, so he wanted to know why the Committee was discussing it. Where was the Department of Arts and Culture (DAC)? The officials owed an apology as they were not in attendance. DAC would be like Treasury and want to come on the last day with changes. The Committee would not allow that. He needed clarity on the challenges about approaching the Minister about the CIPC.

The Chairperson explained to Mr Mbuyane that it had been made very clear that although the advertisement had cautioned the public about not going beyond the scope of the advertised clauses, submissions had been broad ranging. It often happened that responses went way beyond the requested scope. The Committee had focussed on the advertised clauses, but other important issues had also arisen.

The DAC officials had been in attendance the previous week and she was not sure why they were not present today. The Committee Secretary would contact DAC. The National Treasury official responsible for for the Bill had been replaced but the new person had not been au fait with the Bill. The officials from National Treasury had since done a proper handover and then the previous official, Ms Gibson, had come to present to the Committee.

Mr Mahlobo said that in his experience, people always went beyond the scope of the request, but those matters could not be ignored. However, there had to be fairness in the process. Some people would not have raised other concerns because they had adhered to the instructions. How did one justify looking at items outside of the scope when others had not made submissions on those items? He noted that the more one advertised, the more issues were raised. He agreed that it was not a ‘one size fits all’ scenario but that should not stop the Committee from concluding its work. The implementation had to be seamless.

What was the best way to move forward? When one was not disciplined, then people abused the situation. The Committee had been moving forward but now the whole process had opened up again. Normally one did an analysis of those who had made submissions. Were there not people taking a second bite? He would go through that information overnight. If issues were material enough, they could advertise again and then Members would have to consult their party caucuses again. When were the Members going to get a full understanding of those who would need to benefit? At what stage would the Committee get information about that? There was a need for guidance. He noted that significant progress had been made on content issues.

The Chairperson agreed that the Committee did seem to have gone backwards.

Mr Cachalia said that there were a number of issues where there had been progress but where the Committee was struggling was on the remuneration aspect. That was a problem of contention. Why were they struggling there? This was because they sought to allocate shares and rights in the present, in the past and who knew what other date. That sought to supersede the primacy of contract. Contracts might not be perfect, but contracts existed. If the Committee did not resolve this, it would be an area of constant problems and the Bill would be unconstitutional.

Mr Radebe reminded the Committee that the purpose of the Bill was important. Members needed to think about who had been exploited in the past and it had been established that those people would receive redress. The retrospectivity could start at 1910 but the issue was that the contracts were not cast in stone and had to be re-negotiated. The process had been started and it had to be completed. The Committee could not lose focus. The originators of the works had to be attended to.

The Chairperson noted that a substantive matter faced the Committee and some DTI members who had been with the Committee for a couple of years would know that certain items had come up before. Was there a general principle of how far back the legislation should go? And the issue of contract had come up again. Adv Hoon and Adv Strydom would recall those debates. The advertising process was abused by many people, but some genuinely believed that they could add something substantive. Where did one draw the line, or did one take an organic approach and not a linear approach? Contracts were Roman-Dutch Law and the Committee needed to move forward to South African Law.

A number of questions had to be addressed. Firstly, what did the Committee pick up that was outside the scope of the advertisement? Secondly, what were the substantive issues causing problems? There was retrospectivity and how far back it should go. Data was a problem in that instance. Collecting societies was another substantive issue. How far was the Committee going to take that? On copyright, the Committee could go back to the initial Copyright Act in 1978. What about artists who had not known that they had to register rights? The majority party was saying that the country had a responsibility to help those people.
Thirdly, royalties and resale rights had to be "cracked" and she was hoping that old hands in the game would share their expertise on that. Finally, there was the collecting agencies, but the Committee was closer to an agreement there.

The technical team members had to apply their minds to the use of terms such as assignment. They had to agree on generic terminology, authors/writers etc. The Committee was not going backwards. She had never gone backwards. The Committee was going forward in a sober manner.

The Chairperson noted that a number of clauses would need to be advertised for public comment. She asked for a list of what the Committee might possibly have to be advertise.

Copyright clauses to be advertised for comment / require permission from National Assembly
Adv van der Merwe said that there were not many. The first were the clauses on retrospectivity. If the Committee found solutions for the challenges, those solutions were likely to be new to the Bill and would need to be advertised for comment. That was clauses 5, 7 and 9.

The Chairperson asked what had motivated the Committee to advertise the first set of clauses. Was it that the clauses were possibly unconstitutional or were they outside the scope of the Amendment Bill?

Adv van der Merwe explained that the National Assembly was required by the Constitution to facilitate public involvement in the legislative process. That was the start. Then the Committee needed to be practical. When the public gave input, there could be things that caused a Committee to make changes to the Bill. If a Committee made changes based on public input but it was not substantive, then it was not necessary to advertise again. The last set of clauses was advertised because there was something new in the Bill that the public might not have seen, and the Committee might get good comments. When a Bill was changed in Parliament, that change had not been tested by the Department. It was not about constitutionality of the Bill but facilitation of public involvement in the legislation, especially as the Department had not tested the ideas, and to meet the constitutional requirements of engaging the public.

The Chairperson thanked her for refreshing everyone’s memory. She asked her to talk about the unsolicited commentary received from the public.

Adv van der Merwe replied that when comments went broader than the clauses advertised, the Committee would consider comments only on advertised clauses. However, especially in the Copyright Amendment Bill, the Committee could pay attention to other pertinent issues, as far as possible. Sometimes important information came up that was important to the Bill. One example was a public comment that alerted the Committee to the Cybercrimes and Cybersecurity Bill. The Committee should not pay overly much attention to input that was not in response to the advertised clauses to avoid the risk of being unfair, but equally, where a comment was pertinent, one had to consider it. The DTI had listed these extraneous issues and it was for the Committee to determine if it had been dealt with or if it was an important comment.

The Chairperson agreed that the Committee had been unaware of the Cybercrimes and Cybersecurity Bill. She assumed that if a comment was valid, the Committee could choose to pay attention to it.

Ms Theko asked about the comment that said that Technology Protection Measures (TPM) had not been adequately deliberated on. Did it include online contracts where South Africa did not have jurisdiction over them such as Google and Facebook? Or was it about having a South African logo before something went out? She did not have the correct words and did not know how to explain herself. If there was a concern, that had to be looked at further.

Ms Meshendri Padayachy, DTI Deputy Director for Intellectual Property, replied that she would elaborate, and then she would answer the specific question. The submission was about the exception of computer programs. If the Committee looked at the Bill, Members had dealt with exceptions and limitations and deliberated on it and had come to the solution of the hybrid. However, computer programs had been removed and that had removed a piece from a whole. The legislation catered for exceptions across the board but in terms of computers, the Committee had taken out computer programs, which was the heart of digital. The submission felt that there was a balance for disabilities, fair use and education, so asked why programs were being excluded. Why was there not the entire buffet of exceptions?

The second point was the levy but that was for a Money Bill and would make digital devices more expensive in the country. There were already levies on so many things in South Africa.

As far as the collecting societies were concerned, the public felt that the provision of a single society per right should come back because they did not want to go to several collecting societies to pay royalties. SABC had paid both IMPRA and SAMPRA but the societies did not know who to pay. R17 million was paid to one society and R3 million to another, but no one had been paid because no one knew who belonged to which society. There were no distribution plans, so the money was not flowing, and the intention of the Act was not being achieved. The CIPC Commissioner would also be able to explain why the artists were suffering because of multiple collecting societies per right.

On Ms Theko’s question of bringing digitalisation into the Bill, although DTI would like to include digitalisation, there was the issue of exploiting copyright on a digital platform such as Google and Facebook, but that was the mandate of the Department of Communications which was dealing with 5G etc. The Bill could regulate the online contracts with the minimum requirements but that was just standard contract law. The technological protection measure came from the World Intellectual Property Organization (WIPO) Copyright Treaty. One could have a code to lock one’s work - that was in the exceptions in the Bill. The question was about the penalties, etc. No one was supposed hack and break codes, but it was done. Equally, there was a need to create access online. Everyone consumed digitally. The Copyright Amendment Bill could only consider minimum contracts as the space was not that of DTI. The Committee had deliberated on the matter.

The Chairperson asked for Ms Theko's response, although she thought that the matter had been adequately addressed.

Ms Theko replied that musicians were the ones mostly needing copyright online. People were making money online, but they were not even paying tax. How could the country close that gap? The Bill could not neglect online downloads and sales. The Bill was not catering for the key people who had motivated the Bill, i.e. musicians. They were being exploited. The blame could not be moved to the Portfolio Committee on Communications. Was the Committee going to advertise for public input or call in an expert?

The Chairperson suggested that the Committee invited the Department of Communications to join the Committee when that area was discussed.

Mr Mbuyane suggested that the Committee should also check with the Portfolio Committee on Police that was dealing with this so that all the proposals were integrated. If those comments were left outside the broader scope of Parliament, then an opportunity might be created for cybercrime. He proposed that those Committees dealing with the matter should work with the Committee so that the matter could be dealt with.

Mr Mahlobo welcomed the inputs from people, but the people were speaking of their frustrations because there was there no mechanism in law to resolve the deadlock when it came to collecting societies. The Committee had already discussed the matter and one of the points made was the constitutional right of association, and a single collecting society per right denied people that right of association. In South Africa a single institution always brought problems. It was okay that DTI brought the matter of collecting societies back, but the proposal must pass constitutional muster.

Mr Mahlobo said that certain discussions could not be resolved, but the Committee should not hold back the Bill because it would then never be finished. Ms Padayachy was right in that the matters were more about the platforms and security. There were platforms and roll-out of broadband. Platforms were not only South African. What did one do to secure information? The lock and key was always broken. There was royalties. The Chinese had decided to make their own platforms for political reasons. The security legislation that he had worked on when he was in Intelligence, was already becoming outdated. Regulations should tighten things up to allow one to move as quickly as the digital world moved. The discussion of the use of words such as morality and remuneration would just go on. It would be better if there could be an expanded definition and one could use a definition in one’s own context, as long as it was clearly defined. Could the Bill be more innovative and not have the exclusions that allowed people to say that they had been excluded? The Bill had to be responsive to current challenges.

The Chairperson knew that there were policies in operation in CIPC for collecting societies. She wondered whether Google was registered in South Africa as several digital platforms registered in different countries. She asked the CIPC Commissioner to inform the Committee.

CIPC Commissioner Rory Voller explained that international companies that wanted to trade in South Africa, registered as an external company. It was pretty straightforward. All companies had to register with CIPC. On the challenge of collecting societies, he could make an input because CIPC had made a written submission to the Committee based on CIPC experience with collecting societies. Multiple collecting societies resulted in infighting amongst societies and members, which meant that royalties were not distributed. Recently two societies had gone to court and the case had dragged on for years, during which time neither society distributed royalties. It was a stumbling block when it came to payments and artists came to CIPC to complain about distribution plans. It was the responsibility of CIPC to scrutinize the societies to ensure fair and equitable distribution. He noted that administration costs were significant but multiple societies raised the problem of who belonged to which society. And those who paid out royalties wanted a seamless process but had to pay to several societies and did not know who belonged to which society, which should have determined how much each society was paid.

Adv Alberts agreed that the matters were difficult. He wanted to comment on the discussion around collecting societies, right of association and how many collecting societies there should be, and also the right of authors to contract. There were two different rights – a usage right was being propagated for online streaming similar to broadcasting rights. So, there would be a licence fee for streaming. The online industry wanted to be treated the same as radio stations, but could they be treated the same? Online companies had economies vastly greater than South Africa as a country. Even famous artists were having fights with platforms that were not paying royalties and those artists would not allow their work to be played. Should the Committee deal with online electronic communication differently from broadcasting as a service? The legal architecture allowed for that distinction. One would have to be careful not to discriminate but the Committee should not sell out the authors who would get 0.0001% for their work. If the objective was to protect authors, the problem should be defined, and a solution sought to protect them.

Mr Mahlobo noted that challenges of implementation did not give one the right to restrict constitutional rights. Who allowed the societies to exist? Could CIPC not use its authority to deal with societies. The Commission could intervene and require a minimum contract.

Online platforms were spaceless and had no boundaries. What were the threats and limitations of online platforms? The Fourth Industrial Revolution had arrived, and governments would struggle to legislate the online environment. The material was moving in nanoseconds and by the time it reached the second person, it was out of control and no one could do anything. Even advanced democracies did not have legislation to control the digital environment. A person should know that there was a very limited way in which one could protect artists. Artists really made money doing live performances but promoted themselves online. Solidarity said work eight hours, have eight hours leisure and sleep for eight hours. That dream might be closer as robots will start doing our work. One could only do what one could. Platforms were closed down in China but even China was grappling with IP which was one of the biggest problems. It was a challenge that had to be mitigated. One had to identify the problem clearly to find the right solution.

Mr Mbuyane said the topics the Committee was dealing with had not been advertised, such as collecting societies and cyberspace. The Committee was now going back and forth. Where decisions had been taken, those decisions should be adhered to. How could they take cognisance of submissions on collecting societies. The Committee should only deal with those clauses that had been advertised.

The Chairperson explained to Mr Mbuyane that all the issues that had been advertised had been dealt with the previous week when he was not there. Collecting societies had not been finalised and subsequently challenges had arisen. The Committee had not decided on the number of collecting societies. No date had been decided upon for retrospectivity. Another problem was the log sheets which had turned out to be more complicated than the Committee had thought. The Committee had deliberated on the matter at length the previous week and was still examining issues. The offences for non-compliance had created a hullabaloo. How many of the extraneous points raised by the public might have a bearing on the Bill? Did the Committee just ignore those comments on clauses not advertised? Or did the Committee consider that it might have overlooked something. If clauses were to be discussed, they would have to advertised.

Mr Mahlobo said that the Committee had to be careful about  extraneous points raised outside of the advertised clauses as the Committee had to take care not to be unfair. He referred to the start date for retrospectivity. How much data was available on the quantum of the people that the Bill wanted to help? If there was insufficient data available, it could still be managed because, in law, even if there was no clear contract, there could be some mechanism of proof of who was an originator of a work. That mechanism or instrument had to be decided upon. There had to be a provable reason for selecting a date for initiating retrospectivity or that date would be challenged. There also had to be a mechanism for exceptions beyond that date. He compared the retrospective royalties to the question of land and how title deeds, when introduced, had denied land that had belonged to those who originally lived there. It was not only DTI that had to give the input. Other departments should have some records, but the Committee had to decide how one could make a claim in the absence of proof.

Mr Williams pointed out that the people who followed the rules for the second round of submissions were disadvantaged. Those who did not follow the rules and had made submissions that did not relate to the advertised clauses were being given an advantage. When the Committee advertised again, those who had not previously written off the topic, would certainly do so. The Committee should not allow any of it and just bring it all to a stop. The Committee needed to go with what it had.

Ms Padayachy explained that collecting societies were not regulated and the Bill would bring the collecting societies under the full control of CIPC. Currently CIPC could do nothing until it received the distribution plan. The Bill was technologically neutral. The cloud was neutral and could not be regulated. TPM was just a mechanism to protect works and WIPO was working on digital rights while the Performers Bill would deal with the digital rights of performers and singers, etc. Exploitation lay in copyright. It was not possible to regulate the cloud but the Bill could regulate to protect the creator. She reminded the meeting that the broadcast signal could be owned but not the content carried via that signal. The Bill regulated for Netflex etc. Resale royalty rights had not existed nor had the digital platform when the Act had been implemented so the intention was to allow artists to exploit the digital platforms. There would be new collecting societies for audio-visual rights, etc. All of the societies had to be brought under CIPC so that governance issues could be addressed. The Companies Act would also have an impact on the societies as DTI wanted governance issues corrected.

The Chairperson raised the fact that CIPC had not been addressed in the Bill. As IPLAA had not been brought into operation, she wanted a transitional clause for CIPC. The Committee could not overlook CIPC and she was not going to rely on a Bill that had not yet been implemented.

The other item to take account was the Fourth Industrial Revolution and virtual reality. Everyone might have a different view of what the future was going to be like technologically, and it was not possible to legislate for the unknown. However, the legislation should not block technology in the future but, how did one begin to define the virtual reality in the cloud? How did one legislate the cloud? There should not be any entry barriers to innovation. The legislation had to be able to regulate what was reality. Collecting societies would have to be licenced and follow certain procedures and it might be easier to manage them because they were a very concrete thing. Why not consider 2002 needle time or the regulations in 2006? The Committee had not taken the next step to regulate collecting societies. Where the Committee could deal with issues quickly, that had to be done. The Committee might need to call in experts. Even members needed to get experts to guide them personally.

Mr Mahlobo said that, as with any entity operating anywhere in the world, there would always be an enabling piece of legislation. So, they needed enabling legislation for collecting societies to determine their conduct. Those challenges would arise in any situation where an entity was not regulated. People should be allowed to choose a collecting society, but the administration fees would have to be earned.

Unfortunately, despite what his colleagues were suggesting, the Committee could not say that all issues had been closed. He noted that the unrelated comments had raised serious issues and could not be ignored. The process would be even longer if they advertised additional issues. The Committee had made progress but there had to be a fairness of process if some were being listened to, as others were aware of what was happening in the discussions. He suggested that the Committee got advice and became more process driven. The legislation had to be responsive, but it should not be toothless.

Mr Williams suggested that the Committee should move to a point of finalising the issues where there was consensus, and then the Committee could move forward. That process should be started the following day.

Mr Radebe said that he felt that the meeting had been productive and helpful to those who had been away. The Department and the advocate had been very helpful. He recommended that the Committee should deal with the advertised clauses the following day and should not be distracted. The Members needed to be focused. He was worried about looking at unsolicited inputs. Decisions should be made where the Committee could make decisions. Additional issues should be kept for the end. Also, the Committee had to look at what the mandate of the Department had been for the Bill. The parliamentary session was getting shorter and the Committee had to start moving.

Closing remarks
The Chairperson said the 22 August meeting would begin at 14:00 and would proceed until 18:15. Everyone had been effectively briefed. Some of the concerns might be no problem but the main issue was, without a doubt, royalties. It was a huge matter and the Departments, the Legal Services, CIPC, DAC and Communications, if possible, had to come prepared with some suggestions. The Department of Communications had to be at the meetings from the following week. The other big item was the retrospective issue. The Committee had to crack it and not end up with more than one or two flagged clauses to add to the log sheets. There were the lack of compliance offences, the online digital platforms, panorama rights and incidental use that had to be finalised. What was the DTI’s policy intention there? The institution of the Tribunal was still in abeyance as there had been no response from Chief Justice Mogoeng Mogoeng. That had to be followed up. Commissioned work was a problem as the Committee could not agree what commissioned work was. Collecting societies had to be cracked and finally the transitional provisions. Reciprocity had to be discussed and the Committee had to do something about the issue of repatriation before local artists were paid. CIPC should bring a PowerPoint presentation on collecting societies and how to broaden the concept of those societies.

Committee Programme
There would be no meeting on Thursday or Friday this week. The meeting on 28 August 2018 at 10:00 would address the National Credit Amendment Bill with one hour for finalising matters and then the Committee would go through the clause-by-clause. That might necessitate a late finish at about 20:30.

The Chairperson thanked everyone, especially Adv van der Merwe.

The meeting was adjourned

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