Performers’ Protection Amendment Bill: proposed amendments & call for comment; BRRR

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Trade and Industry

17 October 2018
Chairperson: Ms J Fubbs (ANC)
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Meeting Summary

Comment: Additional Clauses in Performers’ Protection Amendment Bill
The Parliament Legal Advisor went through the proposed Portfolio Committee amendments – including several new clauses – after the legal teams had considered the public comments stemming from the Performers’ Protection Amendment Bill and those applicable from the Copyright Amendment Bill and inputs from the Committee.

Members asked about the concept of deeming an Act operational which this Bill introduces; what ‘knowingly contravenes’ implies; should there not be a completely separate Bill for performances since the Bill was created for musical works but now audiovisual works has been added. The clause that prescribed that the default remuneration as 50/50 for performer and recording company was flagged as some Members said that one must respect the sanctity of agreement between contracting parties.

The Committee approved the list of additional clauses that would be advertised for public comment that day with a 31 October deadline . According to Parliament Rules, four of the new clauses would need to be sent to the National Assembly for permission to include them as conceptually they had not been part of the tabled Amendment Bill.

The Committee considered the redrafted Budget Review and Recommendations Report (BRRR) and finalised the Conclusions and Recommendations. They returned in the afternoon to adopt it.

Meeting report

The Chairperson noted the presence of the DTI, Department of Arts and Culture, Office of the State Law Advisor and apologies were received from the Companies and Intellectual Property Commission (CIPC).

List of additional clauses for public comment / approval by National Assembly
Adv Charmaine van der Merwe, Senior Parliamentary Legal Adviser, listed the additional clauses to be advertised for public comment. She noted four provisions would need to be sent to the National Assembly for permission to include them as they went beyond the scope of the Amendment Bill as introduced.

Adv van der Merwe went through the four clauses that would need to be sent to the National Assembly:
▪ New Clause 6 inserting Section 8D(3) and (4) into Act
The change to Section 8D is to do with the Regulations and guidelines. The insertion of section 8D(3) provides for the Minister to prescribe the essential terms of the contract for the performer and producer, broadcaster or user. The insertion of section 8D(4) allows the Minister to prescribe guidelines for a performer to grant consent for someone to use their work. How the performer grants consent should be in Regulations so that one can change them easily as the industry changes or evolves. If this were put in the legislation, it would take too long to make such changes.

▪ New Clause 8 amending Section 9 of Act
The Bill refers to Section 9 Offences and Penalties in the Performers’ Protection Act but if one looks at it, Section 9 has limited scope as it has only three offences and penalties. Section 9 is too limited so it must be amended.

▪ New Clause 9 Amendment of certain expressions
Phonogram, fixation and sound recording are three terms that mean the same thing and it is proposed to use only sound recording.

▪ New Clause 10 Transitional provisions
The Intellectual Property Laws Amendment Act (IPLAA), No 28 of 2013, is not yet promulgated. Clause 10(a) provides the 12 definitions from that Act which would be applicable to this Bill. Clause 10(b) creates a fiction: it deems that IPLAA is operational so that its Regulations clause is operational which allows this Bill's Regulations to become operational but only for the regulations in section 8D(3) and (4).

Discussion
The Chairperson noted that this is the first time she has come across this concept of deeming an Act operational and asked if this would be legitimate.

Adv van der Merwe replied that it was as IPLAA is on the statute book and the deeming refers only to clause 6 amending Section 8D(3) and (4) to avoid the gap that has been created because IPLAA has not commenced.

Mr D Mr Macpherson (DA) referred to section 8D(3) and said that although he has no disagreement as to minimum standards for contracts but he was concerned about 8D(3)(b) which included royalties. Is the Minister being allowed to prescribe the percentage for royalties?

Adv van der Merwe replied that it is not the intention for the Minister to prescribe the actual royalties. It makes clear the minimum terms that must be included. Currently only the only items that appear are listed from 8(3)(a) to (f) until the industry grows.

Ms N Ntlangweni (EFF) asked how long it will take for the House to approve the four provisions.

The Committee Secretary replied that by the time the deadline for the public comments has expired, the approval by the House would have been concluded.

Adv van der Merwe agreed.

The Chairperson said the new clauses for comment would be advertised from today. 

Mr Mahlobo commented that it is clear that section 8D(3) provides for a pro forma contract with the minimum terms to cater for the vacuum that exists. The insertion of this provision means that one can move on this.

The Committee formally agreed to the listed clauses for advertisement.

Performers’ Protection Amendment Bill: proposed Portfolio Committee amendments
Adv van der Merwe said that the combined legal teams sat for a day to work through the issues raised by the public as well as pertinent comments raised by the public on the Copyright Amendment Bill. She took the Committee through the proposed amendments:

Long title
This needed to be extended as it was now a comprehensive Bill that included many more items and she read out what additionally had been included such as the economic rights provision and to broaden the restrictions on the use of performances.

Clause 1 Definitions
‘audiovisual fixation’
Previously there were two types of fixation. Public comment has led to this being amended for clarity. It is proposed to use only audiovisual fixation (images or moving images) and no longer fixation for sound which has been replaced by ‘sound recording’.

‘broadcasting
Use the stem of the word so its use as adverb, verb or noun as in broadcasting / broadcaster is clearer. This has been advertised as there might be a concern.

‘cinematograph film” is deleted.

‘communication to the public’
This had to be amended as some of the wording is no longer used in the Bill. These words were removed and the audiovisual aspect and sound recording aspect have been combined.

'fixation' has been deleted due to the changes made to sound recording. It will be advertised as there might be a concern.

‘performance' has been amended to clarify that it includes a traditional work. It deletes 'works of joint authorship' as the terminology is incorrect as it is a joint work, not joint authorship. It will be advertised.

‘performer’
There were concerns that this definition was too broad and could include the extras or background staff . The Department discussed it with their experts who said that there has been no confusion in the past. Therefore background staff/crew are not included. It also makes provision for other works that were not included such as a traditional work. It also deletes 'works of joint authorship'.

‘phonogram’ is deleted as the public prefer sound recording.

‘producer’
A definition has been inserted as there was uncertainty about this term.

‘sound recording’
This replaces the definition of ‘phonogram’. It is made clear that the sound recording is a copy

‘Tribunal’
Intellectual Property has been removed because the Copyright Amendment Bill has gone back to the use of the Copyright Tribunal. It will be called simply the Tribunal.

Clause 2 Substitution of section 3
Clause 2(2): The public were concerned that although there was recognition of economic rights, the clause was ignoring moral rights that should exist before and after the transfer of economic rights. This amendment clarifies that the performer retains their moral rights.

Clause 2(3): There was concern that the moral rights will remain after a performer’s death. This has been made clear and the term will run similar to other rights in the Copyright Act.

Clause 2(4)(a): The final phrase on royalties is quite an important economic right. This makes it clear that when a performance is communicated that the author can ask for a royalty when authorising.

There are technical amendments in 2(b) to (d) on the two types of fixation

Clause 2(4)(e) The word ‘original’ is removed as this is not rented.

Clause 2(4)(g) provides for a clear economic right.

Clause 2(4)(h) provides for a distribution right. The technical panel in the Copyright Act noted that rental is provided for but distribution is not. This provides a distribution right.

Clause 2(4)(a), (g) and (h) will be advertised for public comment.

Clause 3 Insertion of sections 3A and 3B
Section 3A Transfer of rights has been broken up into subsections as the sentence was too long.

Section 3A(1): The use of “transfer” to the producer was the correct word to use here. ‘Copyright owner’ has been changed to ‘producer’.

Section 3A(2) provides a clear obligation that consent must be contained in a written agreement between performer and producer. These are the minimum terms of the written agreement. The written agreement will be valid for 25 years. The public asked what happens to the rights after 25 years, so ‘revert to performer’ has been inserted. . It is proposed this applies only to sound recording. Why only sound recording? With a sound recording, there is a body of performers such as a band or a choir. However, if you think of a movie, to whom will the right revert as there are so many performers? This is what was decided amongst them and the technical experts. The phrase ‘novated by mutual consent’ is self evident and one does not need to legislate on that.

3B Protection of rights of sound recording
3B(2) makes clear that this right to equal remuneration applies to the producer only if he is a copyright owner of the sound recording. The phrase ‘subject to an agreement to the contrary’ will be advertised. It is proposed that this not be subject to the approval of the Minister as this would be too time consuming. Instead one allows the Minister to prescribe the standard.

Mr Macpherson was concerned that the default remuneration would be 50/50 unless subject to an agreement to the contrary. He did not think it is up to Parliament to prescribe what that remuneration should be. He asked if ‘enjoy the right to share equal remuneration’ means that the default is 50/50.

Adv van der Merwe said that it does unless the parties put in agreement that it is not 50/50.

Dr Evelyn Masotja, DTI Deputy Director General: Consumer and Corporate Regulation, pointed out that there is a current agreement in the industry. They have agreed to this. And they have actually requested this.

Mr Macpherson said he did not think everyone should be collectively bound to this in the legislation. The ‘industry’ does not always speak for everyone. He did not think it should be legislated but left to the contracting parties. The Committee should not be putting a default equitable share into the legislation.

Ms Meshendri Padayachee, DTI Deputy Director: IP and Commercial Law, wanted to make it clear that this applies only for needle time right over radio and the sound recordings. It is not across the board. It is the arrangement between the recording company and performer. This is the policy position behind it.

The Chairperson suggested that they agree to flag ‘enjoy the right to share equal remuneration’. There needed to be more engagement on it.

Mr Macpherson noted that Adv van der Merwe had said that one did not want to put items into the legislation that may need to change. The industry may very well change its mind over time. Let industry have that arrangement but it should not be written into the Bill.

Mr A Alberts (FF+) said that one must respect the sanctity of the agreement and the parties try to agree on the percentage share. If the two parties fail to come to an agreement, one can refer it to the Tribunal. It will look at the practice to see what is fair.

The Chairperson said the Committee is flagging it.

Mr Mahlobo says Mr Alberts is correct. When there is no agreement, disputes arise. Are we enforcing a 50/50 share or is it our intention that when there is no agreement, one comes to a determination that is 50/50?

Clause 4 Amendment of section 5
The wording has been changed to read better and the reworded two types of fixations have been inserted.

Section 5(1)(a)(iv) inserts “by wire or wireless means” which had been inadvertently left out of the Bill. The placement of ‘performer’ has been moved so it does not seem as if it is the performer who is sold but rather the performance.

Section 5(1)(a)(vii) The distribution right was not provided so this brings it in from the Copyright Amendment Bill. This will be advertised for comment.

The insertion of 'royalties or equitable remuneration' was noted which had been left out..

Section 5(1)(b)(iv) and (v): This establishes the selling and commercial rental rights. This has been made clearer. One cannot rent the performance but rather the fixation of the performance.

Section 5(1A) is a new clause about the obligation to record and report usage. This came up from the Copyright Amendment Bill where there was a whole provision of reaching agreements of using sound recordings. It was a very long and protracted process and  criticism from the public was this process was impossible when you are playing music on radio. So in that Bill we came up with a recordal obligation. This has been introduced here but first there is a list of all the actions where you have to record and report as established by the recordal obligation in 5(1A)(h).

Section 5(1B) provides for the consequences for intentionally failing to record and report. It creates an offence and penalty which is exactly the same as in the Copyright Amendment Bill.

The recordal and reporting and the offence clauses will be advertised.

Section 5(4) provides for the producer rather than the copyright owner that was also a concern. It also brings in distribution right and inserts 'royalties or equitable remuneration'. The word ‘representative’ has been changed to ‘respective’ collecting societies as there is more than one party.

Section 5(5) is talking about discharging an obligation to pay. We have discussed whether it should be producer as well as in 5(4). If a person has paid the copyright owner, that person has discharged the obligation to pay so we do not want to make it too onerous for that person. Then the producer and performer can sort it out afterwards.

Clause 5 Amendment of section 8
These are technical amendments.

Clause 6 Amendment of section 8D
Section 8D(3): The compulsory contractual terms will be advertised for comment. The intention is not to stipulate the actual rights but merely state the essential terms of what must be included. Section 8D(4) provides for the Minister to prescribe guidelines for how a performer grants consent. Guidelines do not need an empowering Act. However, if it is included, it strengthens it and it becomes secondary legislation. The performer will then have something to rely on when negotiating.

Clause 7 Insertion of sections 8E and 8F
The Department proposed bringing the sections from Copyright Amendment Bill on prohibited conduct and exceptions for technological protection measures and copyright management information and inserting them here word-for-word so that if anything happens to stall the Copyright Amendment Bill, this Bill will be able to be used:
8E Prohibited conduct in respect of technological protection measures
8F Exceptions in respect of technological protection measure
8G Prohibited conduct in respect of copyright management information
8H Exceptions in respect of copyright management information

In reply to Mr Mahlobo asking if the whole clause would be advertised for public comment, Adv van der Merwe replied that that it would be.

Clause 8 Amendment of section 9
Adv van der Merwe noted the replacement of ‘rents out’ and ‘rental’ instead of the use of the synonym ‘lets for hire’ and ‘hire’ as used in the Performers’ Protection Act. Rental is referenced elsewhere in this Amendment Bill and using the synonym ‘hire’ here could be interpreted that it means something different.

Section 9(1)(d) has been added to provide for offences relating to section 8E through to 8H.

Section 9(1)(f) provides for the penalties for the new offences in 9(1)(d).
It was noted that no fine amount has been inserted so that the courts can adjust the fine according to inflation.

Clause 9 Amendment of certain expressions
‘Phonogram’ and ‘fixation’ in the context of sound recording are replaced by ‘sound recording’.

Clause 10 Transitional provisions
This caters for the uncertainty about when the Intellectual Property Laws Amendment Act of 2013 will commence. To prevent the stalling of the commencement of this Bill due to the potential non-commencement of IPLAA this takes the required definitions and inserts them as transitional provisions in Clause 10. It also provides this deeming so the Minister can make regulations about contracts as well as guidelines in 10(b):

“Until the date of commencement of the Intellectual Property Laws Amendment Act, 2013 (Act No. 28 of 2013) section 8D of the principal Act will be deemed to be operational: Provided that the Minister may only make the regulations contemplated in section 8D(3)and (4) as added by the Performers Protection Amendment Act, 2019”.

Clause 11 Short title and commencement
The year of commencement has been changed from 2016 to 2019.

In conclusion, Adv van der Merwe again emphasized that these proposed amendments were based on comments from the public on both Bills and all the legal teams worked together on this.

Discussion
The Chairperson said the Committee appreciated the joint efforts of the team and that Adv van der Merwe had the interests of Portfolio Committee at heart.

Mr M Mbuyane (ANC) asked what ‘knowingly contravenes’ implies in Section 9(1)(d) and if there is a definition. When one invites someone to perform at one's wedding when is it performance or fixation. He asked for clarity between commercial rental and hire.

Dr Masotja replied that the live wedding performance is the original performance. Once recorded, it is fixated and then you talk about reproduction and you can have copies of that fixated performance. The term ‘commercial rental’ is taken from the international treaties. ‘Rental’ and ‘hire’ mean same thing and we are trying to ensure alignment of the wording in Bill.

Mr Alberts said the Bill was created for musical works. Now we are adding audiovisual works to it. There is no problem in principle but his concern is whether this could lead to an attack on the Bill because of the co-mingling of rights. Should there not be a completely separate Bill for performances which does not create copyright ownership but they will have an economic right for re-runs or exhibition of the fixated work?  His question was whether we are not on dangerous ground.

Dr Masotja replied that they do not think there is a conflict. We are talking about performers. The economic and moral rights are coming from the treaties. What we are doing here is to ensure economic and moral rights for the performer. As these are musical and audiovisual works, there is alignment with the Copyright Amendment Bill. These are neighbouring rights from the treaties. They should talk to each other and be aligned. You are right - we will look at the legalities. But where we are now we think there is alignment. WIPO experts have agreed. There are no contradictions but we are live to this concern. The advertising of the clauses for comment will strengthen this as well. The issue around performers is long overdue as nothing has changed since the 1967 Act and the gap is so wide. This Amendment Bill is going to make a huge difference in our society. The legal team will ensure by the final draft that everything will be aligned.

Ms Padayachee referenced the Berne Convention as the founding document for the trade-related aspects of the WTO. The WTO deals with the related and neighbouring and those three rights are for performers, producers of sound recordings and phonograms and broadcasting. Why we brought over the audiovisual performer into this Bill, other than being a performer, is that traditionally they were left out of the negotiations if you look at the Rome Convention and WIPO. Then Beijing came through from WIPO and it changed the dynamics. But the TRIPS agreement gives the policy space to cover it in the neighbouring legislation. We are not giving them copyright. Nothing in the Bill gives them copyright ownership. It gives them an authorisation right and two economic rights from Beijing and it has been drafted that way to ensure alignment with TRIPS and WIPO because there were public comments about "don't treat us like musicians; don’t bring us into the same Bill". That is why we covered it methodically like that. She concluded that we are allowed to do this.

Addressing Mr Mbuyane, Ms Padayachee explained that fixation is just a fancy way to say that now you will be able to watch it on DVD or see it broadcast on television or streamed as a video clip on Facebook. On commercial rental, the Bill modernizes the Act.  It allows the audiovisual performer to see that they can rent out their performance on a DVD or through other mediums such as streaming.

Dr Ria Nonyana-Mokabane, DTI Chief Director: Legislative Drafting, replied to Mr Mbuyane about why we used ‘knowingly contravenes’, saying the wording is trying to be very explicit about intention where the punishment will be severe. This is rather than a breach where there is negligence and there is no intention. Obviously the intention will have to be founded on reasonable doubt.

Adv van der Merwe replied that 'knowingly' is not defined in the Bill or Act. It is found in the National Credit Amendment Bill and in the Companies Act where it was defined. The reason we used 'knowingly' rather than 'intentionally' is that is what the current Act uses so we had to fit in with the wording. It can be defined but this deals with the person himself and not a director so she thinks in this Bill the dictionary definition is enough and we do not need to define it.

Mr Mahlobo commended multidisciplinary team that included DAC and DTI. The Committee had been faced with a problem statement which was the plight of the performers. This Bill now ensures they are much better off. How have you taken into account the related legislation? It was important to avoid creating legislation that is in conflict with other legislation. He suggested they do a fine comb though as a final check. The Committee must not leave a vacuum put provide this long overdue relief and conclude the Bill by putting in the extra hours. His concern was about the deeming clause being able to cover the vacuum.

Adv van der Merwe assured him that even if IPLAA never comes into operation, the deeming clause means that the vacuum will be covered for the purposes of making those regulations.

Budget Review and Recommendations Report (BRRR)
The Chairperson read through the re-drafted Report starting with Conclusions. Various contributions from Members were included. Thereafter the Recommendations were addressed.

The Committee had a one hour recess to allow for the Committee Advisor and Researcher to make the changes. When they reconvened, they agreed the changes have been captured and adopted the BRRR.

The DA and FF+ abstained. There were no objections.

The Chairperson noted the changes to the programme:
23 October: Incentives report briefing
24 October: Gambling Amendment Bill: public hearings 9am
26 October: Gambling Amendment Bill: public hearings 8.30 – 3pm
30 October: Department response to Gambling Amendment Bill submissions

She noted that all Members should be present for the 13 November formal adoption of the Copyright Amendment Bill (2-6pm). This Bill had been a challenge as they had had to redraft a major piece of legislation.

She noted that the Department had to be notified that it was vital to get the SABS Annual Report.

Meeting adjourned.

 

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